If housing values appreciate at a rate of 3 percent a year, what will a $100,000 house be worth in ten years?

To determine the future value of a house that appreciates at a rate of 3 percent per year over a period of ten years, you can use the formula for compound interest:

Future Value = Present Value * (1 + rate)^(number of years)

In this scenario, the present value is $100,000, the annual appreciation rate is 3 percent (or 0.03 in decimal form), and the number of years is 10.

Applying these values to the formula:

Future Value = $100,000 * (1 + 0.03)^10

Future Value = $100,000 * (1.03)^10

Future Value = $100,000 * 1.3439 (approximately)

Calculating this gives:

Future Value ≈ $134,390

This calculation shows that after ten years, a house valued at $100,000 appreciating at an annual rate of 3 percent will be worth approximately $134,390. This understanding of compound interest and appreciation is critical for financial planning and investment forecasting, which are key concepts for an Accredited Financial Counselor.