I know the answer is 1.53%. How do you find the annual apprecation rates that gi

Question

I know the answer is 1.53%. How do you find the annual apprecation rates that give you the 1.53%?

The owner of a two-acre commercial site insists that her property has appreciated by at least 5% per year since she bought it four years ago. As the appraiser, you are asked to factor this into the appraisal or refute her contention. Research in this market revealed the following sales and reseals of comparable properties: Price Annual Appreciation Rate Date 1Price 1 month ago $200,000 $195,000 $195,000 $187,000 $210,000 S210,000 $192,000 $187,000 Price 3 years and 1 month ago- 2Price 3 months ago:- Price 2 years and 4 months ago- 3Price 1 month ago- Price 2 years and 4 months ago- 4Sale 2 months ago- Sale 1 year ago- What is the average annualized reconciles appreciation rate on a straight- line basis? Use annual accounting ? 1.53% ? .86% ? 2% ? 3.2%

Explanation / Answer

Price at Period 1 Price at Period 0 Increase in Price Increase in Price as % of Price at 0 Difference in Period 1 and Period 0(in years) Annualised Increase in %          2,00,000          1,95,000            5,000 2.56%                    3.00 0.85%          1,95,000          1,87,000            8,000 4.28%                    2.08 2.05%          2,10,000          2,10,000                   -   0.00%                    2.25 0.00%          1,92,000          1,87,000            5,000 2.67%                    0.83 3.21% Total 6.12% Average 1.53%

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