5

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

8

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.

0

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.

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