Doris Wade purchased a condominium for $45,000 in 1980. Her down payment was $10,000. She financed the remaining amount as a $35,000, 35-year mortgage at 6%, compounded monthly. Her monthly payments are $200. It is now 2000 (20 years later) and Doris has sold the condominium for $100,000, immediately after making her 240th payment on the unit. Find her effective annual internal rate of return on this investment. Choose the closest answer below. O A. 6.4% B. 8.5% C. 4.4% D. 2.3%
Doris Wade purchased a condominium for $45,000 in 1980. Her down payment was $10,000. She financed the remaining amount as a $35,000, 35-year mortgage at 6%, compounded monthly. Her monthly payments are $200. It is now 2000 (20 years later) and Doris has sold the condominium for $100,000, immediately after making her 240th payment on the unit. Find her effective annual internal rate of return on this investment. Choose the closest answer below. O A. 6.4% B. 8.5% C. 4.4% D. 2.3%
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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Transcribed Image Text:Doris Wade purchased a condominium for $45,000 in 1980. Her down payment was $10,000. She financed the remaining amount as a
$35,000, 35-year mortgage at 6%, compounded monthly. Her monthly payments are $200. It is now 2000 (20 years later) and Doris has
sold the condominium for $100,000, immediately after making her 240th payment on the unit. Find her effective annual internal rate of
return on this investment.
Choose the closest answer below.
A. 6.4%
B. 8.5%
C. 4.4%
D. 2.3%
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