CA Salesperson Exam: Calculating Appreciation & Depreciation

[TJ Park]

Hi,

Had a quick question about calculating appreciation and depreciation for the salesperson exam: If a property was purchased at $500,000 and appreciates 8% per year until it is sold 5 years later, do you calculate a flat annual 8% in dollar terms or percentage terms? I'm using a practice book that uses the first, but I'm not sure I agree.

$500,000 + ($500,000 x 8% x 5 years) = $700,000

$500,000 x 1.08^5 = $734,664.04

Which would be the correct answer for purposes of the exam?

Many thanks,

TJ