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purchase apartmer spent renovation of the property. Each tenant will pay $14,000 per year in rent. Tax and maintenanc costs of $3000/year/apartment are paid by the investor. The investor would like to make 18% annual profit on the investment. How much must the property be sold for at the end of 10 year in order to make this Rate of Return most nearly? (A) $257,200 (B) $1,250,000 (C) $1,500,000 (D) $1,600,000

purchase apartmer spent renovation of the property. Each tenant will pay $14,000 per year in rent. Tax and maintenanc costs of $3000/year/apartment are paid by the investor. The investor would like to make 18% annual profit on the investment. How much must the property be sold for at the end of 10 year in order to make this Rate of Return most nearly? (A) $257,200 (B) $1,250,000 (C) $1,500,000 (D) $1,600,000

Essentials Of Investments
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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Problem 39: The purchase price of a duplex apartment is $300,000 and $35,000 were spent on renovation of the property. Each tenant will pay $14,000 per year in rent. Tax and maintenance costs of $3000/year/apartment are paid by the investor. The investor would like to make 18% annual profit on the investment. How much must the property be sold for at the end of 10 years in order to make this Rate of Return most nearly? (A) $257,200 (B) $1,250,000 (C) $1,500,000 (D) $1,600,000
Transcribed Image Text:Problem 39: The purchase price of a duplex apartment is $300,000 and $35,000 were spent on renovation of the property. Each tenant will pay $14,000 per year in rent. Tax and maintenance costs of $3000/year/apartment are paid by the investor. The investor would like to make 18% annual profit on the investment. How much must the property be sold for at the end of 10 years in order to make this Rate of Return most nearly? (A) $257,200 (B) $1,250,000 (C) $1,500,000 (D) $1,600,000
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