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House Price Formula:
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The house price growth formula calculates the future value of a property based on compound interest principles. It projects how a property's value will change over time given a consistent annual growth rate.
The calculator uses the compound growth formula:
Where:
Explanation: The formula calculates how an initial investment grows at a compound rate over time, showing the power of compounding in real estate appreciation.
Details: Accurate price projections help homeowners, investors, and financial planners make informed decisions about property investments, sales timing, and retirement planning.
Tips: Enter the initial property price in currency, the expected annual growth rate as a percentage, and the time period in years. All values must be valid (price > 0, rate ≥ 0, time > 0).
Q1: How accurate are these projections?
A: Projections assume a constant growth rate, which rarely happens in real markets. Use as an estimate rather than a guarantee.
Q2: Should I include inflation in these calculations?
A: The calculator shows nominal growth. For real growth (adjusted for inflation), subtract the inflation rate from your growth rate.
Q3: What's a typical annual growth rate for housing?
A: Historically, housing prices have grown at about 3-5% annually on average, but this varies significantly by location and economic conditions.
Q4: Can this calculator account for property improvements?
A: No, this calculates market appreciation only. Property improvements would need to be added separately to the initial value.
Q5: How does this differ from simple interest calculations?
A: Compound growth means each year's growth builds on the previous year's value, resulting in exponential growth rather than linear growth.