When people say real estate has appreciated 8 % over the past 5 years, do they mean 8 % compounded annually? or simple interest annually?


2 Answers 2


Typically related to real estate prices they mean simple interest. For example assume in 2005 a property is worth $100,000.00. In 2010 that property would be worth $108,000.00.


They are talking about a beginning and ending point. If you are trying to forecast appreciation for an investment over many years, use compound interest.

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .