Question 21 You are considering the purchase of a property today for $340,000. You plan to finance it with an 80 percent loan. The appreciation rate on the property value is expected to be 4 percent annually for the next three years. (20 Points. Please provide detailed steps for your answer. Answer without explanation will NOT receive credit.) 1. Approximate the expected annual average rate of appreciation on home equity for the next three years. 2. What if you now think that a $340,000 purchase price may be somewhat high and that if you pay this price, the expected appreciation rates in your house price will be as follows: year 1 = 0%, year 2 = 2%, and year 3 = 3%. Approximate the expected annual average rate of appreciation on home equity for the next three years.

You are considering the purchase of a property today for $340,000. You plan to finance it with an 80 percent loan. The appreciation rate on the property value is expected to be 4 percent annually for the next three years. (20 Points. Please provide detalled steps for your answer. Answer without explanation will NOT receive credit.) 1. Approximate the expected annual average rate of appreciation on home equity for the next three years. 2. What if you now think that a $340,000 purchase price may be somewhat high and that if you pay this price, the expected appreciation rates in your house price will be as follows: year 1=0%, year 2=2%, and year 3=3%. Approximate the expected annual average rate of appreciation on home equity for the next three years