Appreciation
uh-pree-shee-AY-shun
/əˌpriːʃiˈeɪʃən/
An increase in the value of an asset over time.
In finance, it specifically refers to an increase in the value of a currency or other asset relative to another.
The story behind the word. The word 'appreciation' comes from the Latin 'ad-' (meaning 'to' or 'towards') and 'pretium' (meaning 'price' or 'value'). So, to 'appreciate' literally means 'to set a price to' or 'to add value to.' Over time, it evolved to mean an increase in value, like when your house 'appreciates' in worth.
Word relationships
- gain: More general, can refer to any increase or profit.
- increase: Broader, refers to any rise in amount or level.
- depreciation: A decrease in the value of an asset over time.
- devaluation: A deliberate downward adjustment of a country's currency value by its government.
Commonly confused with
- Inflation: Inflation is a general increase in prices and fall in the purchasing value of money, while appreciation is an increase in the relative value of an asset or currency.
Word family
- appreciate (verb): to increase in value over time.
Collocations
- currency appreciation
- property appreciation
- significant appreciation
- steady appreciation
- capital appreciation
Example sentences
- "The appreciation of the Euro against the US dollar made European goods more expensive for American consumers." Reporting on currency markets.
- "Many homeowners hope for a steady appreciation in the value of their property over the long term." Discussing investment returns.
Memory hook
When something APPRECIATES, its 'PRICE' (pretium) goes 'UP' (ad-). Think of a grateful person 'appreciating' a gift, valuing it more. Value up
When not to use
Do not use 'appreciation' when referring to a general increase in quantity or size; 'growth' or 'expansion' might be better.
Fun facts
- The other common meaning of 'appreciation' is 'gratitude' or 'understanding,' showing how the idea of valuing something extends beyond just monetary worth.
Related words
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