Purchase of an office building = $3,200,000
5 years later the price is = $3,751,200
Let Appreciation rate is 'R'
$3,200,000 * (1 + R)5 = $3,751,200
(1 + R)5 = 1.17225
Apply 'Log' on both sides
Log(1 + R)5 = Log(1.17225)
5 * Log(1+R) = 0.06902024
Log(1+R) = 0.013804048
Apply 'Antilog' on both sides
Antilog [log(1+R)] = Antilog(0.013804048)
(1 + R) = 1.0323
R = 0.0323
R = 3.23%
Expected Appreciation rate = 3.23%
Question 8 10 pts An investor is considering the purchase of an office building for $3.2...
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