How to Calculate Appreciation

Divide the final value of the investment from the initial value of the investment

Step 1

Divide the final value of the investment from the initial value of the investment. For example, if you purchased your home for $200,000 and five years later the value equals $230,000, you would divide $230,000 by $200,000 to get 1.15.

Raise the result to the 1/Tth power

Step 2

Raise the result from Step 1 to the 1/Tth power, with T being the time in years the appreciation took place over. Continuing the example, you would raise 1.15 to the 1/5 power to get 1.028346722.

Subract 1 from the result in Step 2

Step 3

Subtract 1 from the result in Step 2. Furthering the example, you would subtract 1 from 1.028346722 to get 0.028346722.

Multiply the result from Step 3 by 100

Step 4

Multiply the result from Step 3 by 100 to find the annual appreciation rate. Concluding the example, you would multiply 0.028346722 to find the annual appreciation rate on the property to be about 2.83 percent per year.