Appreciation Rate Calculator

How to Calculate Property Appreciation Rate

1. Formula for Appreciation Rate (CAGR):\text{Appreciation Rate (\%)} = \left( \frac{\text{Final Value}}{\text{Initial Value}} \right)^{\frac{1}{\text{Years}}} - 1
   • Initial Value: The value of the property at the beginning of the period.
   • Final Value: The value of the property at the end of the period.
   • Years: The time period over which the value has appreciated.
2. Convert to Percentage: Multiply the result by 100 to get the appreciation rate in percentage terms.

Example

Imagine you purchased a property for $200,000 five years ago, and its current value is $300,000.

• Calculate the CAGR:\text{CAGR} = \left( \frac{300,000}{200,000} \right)^{\frac{1}{5}} - 1\text{CAGR} = (1.5)^{0.2} - 1 \approx 0.08447
• Convert to Percentage:\text{Appreciation Rate} = 0.08447 \times 100 \approx 8.45\%

The property has appreciated at an annual rate of approximately 8.45% over the last five years.