Question

The Marriott family bought a new apartment three years ago for $65,000. The apartment is now worth $86,515. Assuming a steady rate of growth, what was the yearly rate of appreciation?

Select one:
a. 8%
b. 10%
c. 12%
d. 14%

Answer 1

The yearly rate of appreciation for the apartment is approximately 11%.

Step-by-step explanation:

To find the yearly rate of appreciation, we first need to calculate the increase in value of the apartment over three years. The increase is $86,515 - $65,000 = $21,515. Next, we divide the increase by the original value of the apartment, $65,000, and multiply by 100 to find the percentage increase. So, the percentage increase is ($21,515/$65,000)*100 = 33.1%. Therefore, the yearly rate of appreciation is 33.1%/3 = 11.03%. Rounding to the nearest whole number, the yearly rate of appreciation is approximately 11%.