A realtor buys a house for $200,000 and spends $1000 per year on maintenance for the next 8 years. For how much should she sell the property to make a profit of $40,000? Assume i = 12% per annum.
A realtor buys a house for $200,000 and spends $1000 per year on maintenance for the next 8 years. For how much should she sell the property to make a profit of $40,000? Assume i = 12% per annum.
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This looks like a test question not a real life one.
Hope you have your calculator cuz that is your part here:
First does the interest matter? if so then you have to do the compounding thing year by year.
Is this as simple as it looks at first glance 200000+8000=208000 plus 40000 to get to 40K profit
You add the expenses to the buy price to get them covered in the sell price then add the profit.
In real life this doesn’t matter because the buyers dictate the market and they will set the price they will pay so the seller setting a starting point is a guess to test the waters! They take what the market will offer . Good luck!