Answer:
3.18% price growth rate
Average increase in rent is $8737.5 per year
Explanation:
Average Price in Oct 2000 = $215,100
Average Price in Oct 2016 = $354,900
No of years past = Oct 2016 - Oct 2000 = 16 years
Using following formula to calculate Average increase in price:
PV = FV / (1+r)^n
Value in 2000 = Value in 2016 x (1 + rate of increase )^number of year
215,100 = 354,900 x [tex]{( 1 + r )^16}[/tex]
[tex]{( 1 + r )^16}[/tex] = 354,900 / 215,100
[tex]\sqrt[16]{( 1 + r )^16} = \sqrt[16]{1.65}[/tex]
1 + r = 1.0318
r = 1.0318 - 1
r = 0.0318
r = 3.18%
Average
Total Difference = 354,900 - 215,100 = $139,800
Average Increase = $139,800 / 16 = $8737.5 per year
