The Appraisal Method Most Likely to Provide Only a Rough

question 69

True/False

The appraisal method most likely to provide only a rough estimate of the value of a rental property is the cost approach.

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Definitions:

Compounded Annually

The process where the interest earned in one period is added to the principal, and then interest in the next period is calculated on the new total.

Annual Payments

Regular payments made once a year, often related to loans, annuities, or other financial instruments.

EAR

Stands for Effective Annual Rate, which is the real return on an investment, accounting for the effect of compounding interest over a period.

Compounded Semi-Annually

Concerns the process where the interest earned on an investment is added to the principal twice a year, allowing the interest to earn interest.