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THE SCENARIO
My grandmother told me about a house that she and my grandfather used to own that she'd rented to a guy for years and years. Eventually, my grandfather died and my grandmother was getting ready to move to Florida full-time, and she offered to sell the house to the tenant before going. He was interested, and they agreed on a price of $48,000.
She found out recently that the tenant had finally needed to move, himself, and sold the house for $79,000. He owned the house for 28 years.
The question: What was the average annual appreciation of the house over the 28 years the man owned the house? Assume monthly compounding.
THE SOLUTION... Read more...
