Question

According to the Census Bureau, in October 2016, the average house price in the United States was $354,900. In October 2000, the average price was $215,100. What was the annual increase in the price of the average house sold? (Do not round intermediate calculations and enter your answer as a percent rounded answer to 2 decimal places, e.g., 32.16.)

Answer 1

Answer:

3.18%

Explanation:

The computation of the annual increase in the price is shown below:

= (Average price in year 2016 ÷ Average house price in year 2000)^(1 ÷ difference in years) - 1

= ($354,900 ÷ $215,100)^(1 ÷ 16) - 1

= 1.65^(1 ÷ 16) - 1

= 1.031793402  - 1

= 3.18%

The difference in years would be

= Year 2016 - Year 2000

= 16 years