A real estate development company is planning to build five homes, each costing $195,000, in 2 years. The Galaxy Bank pays 6% interest compounded semiannually. How much (in s) should the company invest now to have sufficient funds to build the homes in the future?

A real estate development company is planning to build five homes, each costing $195,000, in 2 years. The Galaxy Bank pays 6% interest compounded semiannually. How much (in s) should the company invest now to have sufficient funds to build the homes in the future?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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A real estate development company is planning to build five homes, each costing $195,000, in $1 \frac{1}{2}$ years. The Galaxy Bank pays 6% interest compounded semiannually. How much (in $) should the company invest now to have sufficient funds to build the homes in the future?

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