According to the Census Bureau, in October 2022, the average house price in the United States was $400,500. In October 2000, the average price was $197,700. What was the annual increase in the price of the average house sold?

To calculate the annual increase in the price of the average house sold from October 2000 to October 2022, we can use the formula for the **annual growth rate**:

\[
\text{Annual Growth Rate} = \left( \frac{P_{\text{final}}}{P_{\text{initial}}} \right)^{\frac{1}{n}} - 1
\]

Where:
- $ P_{\text{final}} $ is the house price in 2022: $400,500
- $ P_{\text{initial}} $ is the house price in 2000: $197,700
- $ n $ is the number of years between 2000 and 2022: 22 years

Let's calculate this.The average annual increase in the price of a house from October 2000 to October 2022 was approximately **3.26%** per year.

Would you like more details or have any questions about this calculation?

Here are 5 related questions to deepen your understanding:
1. What is the formula for compound interest, and how does it relate to growth rates?
2. How would the annual growth rate change if the house prices were significantly higher or lower?
3. What is the difference between simple growth and compound growth in real estate?
4. How does inflation affect the real value of the annual house price increase?
5. Can we predict future house prices based on this historical growth rate?

**Tip:** Understanding compound growth is crucial when analyzing long-term investments like real estate. It reflects how values grow exponentially over time.

Find out how to calculate the annual increase in house prices from October 2000 to October 2022, using the average price growth from $197,700 to $400,500. Learn the formula for annual growth rate and see the solution with real-world data. Suitable for high school students learning about exponential growth.

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