If a property was worth $233,087 two years ago and appreciated at a rate of 6% each year, what is its current value?

If a property was worth $233,087 two years ago and appreciated at a rate of 6% each year, what is its current value?

• A. $259,633
• B. $263,942
• C. $261,897
• D. $261,057

Answer: (C)

To determine the current value of a property that appreciates at a rate of 6% annually, you can use the formula for compound interest, which can also be applied to investment appreciation. The formula is: \[ \text{Future Value} = \text{Present Value} \times (1 + r)^n \] where: - Present Value is the initial value of the property ($233,087) - \( r \) is the annual appreciation rate (6% or 0.06) - \( n \) is the number of years (2 years) Applying the formula: 1. Calculate \( (1 + r)^n \): \[ (1 + 0.06)^2 = 1.06^2 = 1.1236 \] 2. Multiply this result by the initial property value: \[ \text{Future Value} = 233,087 \times 1.1236 \] \[ \text{Future Value} = 261,896.1572 \] Rounding this to the nearest dollar gives us $261,896, which aligns with the choice of $261,897. This is the correct value that reflects the compounded appreciation of the property over

To determine the current value of a property that appreciates at a rate of 6% annually, you can use the formula for compound interest, which can also be applied to investment appreciation. The formula is:

[ \text{Future Value} = \text{Present Value} \times (1 + r)^n ]

where:

• Present Value is the initial value of the property ($233,087)

• ( r ) is the annual appreciation rate (6% or 0.06)

• ( n ) is the number of years (2 years)

Applying the formula:

1. Calculate ( (1 + r)^n ):

[ (1 + 0.06)^2 = 1.06^2 = 1.1236 ]

2. Multiply this result by the initial property value:

[ \text{Future Value} = 233,087 \times 1.1236 ]

[ \text{Future Value} = 261,896.1572 ]

Rounding this to the nearest dollar gives us $261,896, which aligns with the choice of $261,897. This is the correct value that reflects the compounded appreciation of the property over