Question

Joe and Linda have the opportunity to purchase a new home. The house in Glen Oaks is currently worth $250,000 but is predicted to be worth $270,000 in a year. What is the rate of appreciation for the house from one year to the next?

Answer 1

You can work out the percentage change and that would help you work out the rate of appreciation :)

The formula is ((new value - old value)/old value) * 100.

So you do
`(270,000 - 250,000)/(250,000) * 100 = 8\%`

Therefore the rate of appreciation is 8% p/a.