## Home 1: Stand-Alone House **Purchase Price:** $198,000 **Future Value:** $229,000 **Features:** - Two bedrooms, 1 bathroom - Large fenced yard - New roof installed last year - Single-car garage - Driving required (at least 10 minutes to work, school, shopping, entertainment) - City bus stops 10 minutes away - Near an elementary school, a dog park, and walking trails  --- ## Home 2: Condominium **Purchase Price:** $256,000 **Future Value:** $390,000 **Features:** - Two bedrooms, 2 bathrooms - Shared garden area - Monthly maintenance fee of $200 required (in addition to regular mortgage) - Free covered parking for residents - Within walking distance to school, work, shopping, entertainment - Sheltered city bus stop at the corner  **Home 3: House on the Water** **Purchase Price:** $231,000 **Future Value:** $255,000 **Features:** - One bedroom, 1.5 bathroom - Private yard with existing garden - New windows installed 3 years ago - No garage - You must drive at least 20 minutes for work, school, shopping, and entertainment - Open city bus stop is 5 minutes away - Local grocer will deliver to you for no additional charge - This house has been known to flood when the water is high **Description:** This section features a house located on the water, offering a picturesque view. While it does not have a garage, it boasts a private yard with a beautiful existing garden. Newly installed windows enhance the property, highlighting its charm and comfort. Although it requires a bit of a commute to various amenities, essential services are still accessible, with a city bus stop conveniently located nearby. Caution is advised, however, as the property is prone to flooding during high water levels.
Calculate the appreciation rate of each home. Show your work. Then, write at least two paragraphs that discuss which home you’d like to buy, based on the rate at which it will appreciate and its features.
In paragraph 1, include each appreciation rate. Why do you think the appreciation rates are different for each home? Explain your reasoning. In paragraph 2, compare and contrast the features of the homes, based on what you would be looking for in a house. Be sure to state which home you would want to buy.
(If you buy Home 1, you think that you will own it for 3.5 years, but if you buy Home 2, you will likely own it for 7.25 years. You’re unsure how long you might stay in Home 3, but you think it would be about 4.75 years.)
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## Home 2: Condominium
**Purchase Price:** $256,000
**Future Value:** $390,000
**Features:**
- Two bedrooms, 2 bathrooms
- Shared garden area
- Monthly maintenance fee of $200 required (in addition to regular mortgage)
- Free covered parking for residents
- Within walking distance to school, work, shopping, entertainment
- Sheltered city bus stop at the corner
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Appreciation rate for home 1 = Future value - purchase price / purchase price * 100
= $2,29,000 - $1,98,000 / $1,98,000 * 100
= 15.65%
Appreciation rate for home 2 = Future value - purchase price / purchase price * 100
= $3,90,000 - $2,56,000 / $2,56,000 * 100
= 52.34%
Appreciation rate for home 3 = Future value - purchase price / purchase price * 100
= $2,55,000 - $2,31,000 / $2,31,000 * 100
= 10.39%
Reason for different appreciation rates:
Home 2 (Condominium) is having high appreciation rate compared to home 1 (Stand alone house) & Home 3 (House on the water). Appreciation rates are different for 3 houses because all the 3 houses are located in different locations & based on the locality & area of the house, appreciation will increase.
Due to the following reasons , home 2 has higher appreciation rate.
1. Additional bathroom compared to home 1 & home 3.
2. Additional bedroom compared to home 3.
3. Home 2 is located in walkable distance to school, work, shopping & entertainment areas whereas, home 1, they have to travel atleast 10 minutes & home 3 they have to travel atleast 20 minutes.
4. Home 2 is located in middle of the city, whereas, home 1 is located in outskirts of the city & home 3 has located on the water.
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