# What is constant appreciation?

An example of constant appreciation is simple interest. This is where interest is typically paid on the principal annually. For instance, $1000 is invested in a term deposit at 2% simple interest for 5 years . What is the value of the term deposit at the end of 5 years? 2% of$1000 is $20, so$20 is the constant appreciation. At the end of 5 years, the term deposit would be worth $1100: $1000+5xx\$20.