Sharmin is currently living in Montreal, Canada. She has been living there for a decade now, working in an investment bank. During her vacation in Vancouver, she saw her dream house there and could not forget it. Currently this house is listed with a sales price of $6, 68,000 CAD. She is now 30 years old and planning to go for an early retirement at 35. According to her estimation prices of house is increasing an average rate of 5% every year and this growth is expected to go on for next 15 years. Currently she has $60000 in a saving account which pays 9% annually after tax. She has decided to invest $1,10,000 annually each of the next 7 years to cash purchase of such a house; her 1st deposit starts at the end of the current year. Do you think her decision to invest $1,10,000 is a right decision to buy the house when she retires?
Sharmin is currently living in Montreal, Canada. She has been living there for a decade now, working in an investment bank. During her vacation in Vancouver, she saw her dream house there and could not forget it. Currently this house is listed with a sales price of $6, 68,000 CAD. She is now 30 years old and planning to go for an early retirement at 35. According to her estimation prices of house is increasing an average rate of 5% every year and this growth is expected to go on for next 15 years. Currently she has $60000 in a saving account which pays 9% annually after tax. She has decided to invest $1,10,000 annually each of the next 7 years to cash purchase of such a house; her 1st deposit starts at the end of the current year. Do you think her decision to invest $1,10,000 is a right decision to buy the house when she retires?
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
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Transcribed Image Text:Sharmin is currently living in Montreal,
Canada. She has been living there for a
decade now, working in an investment bank.
During her vacation in Vancouver, she saw her
dream house there and could not forget it.
Currently this house is listed with a sales price
of $6, 68,000 CAD. She is now 30 years old
and planning to go for an early retirement at
35. According to her estimation prices of
house is increasing an average rate of 5%
every year and this growth is expected to go
on for next 15 years. Currently she has
$60000 in a saving account which pays 9%
annually after tax. She has decided to invest
$1,10,000 annually each of the next 7 years to
cash purchase of such a house; her 1st
deposit starts at the end of the current year.
Do you think her decision to invest $1,10,000
is a right decision to buy the house when she
retires?
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