Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

At 45 years of age, Seth figured he wanted to work only 10 more years. Being a full-time landlord had a lot of advantages: cash

At 45 years of age, Seth figured he wanted to work only 10 more years. Being a full-time landlord had a lot of advantages: cash flow, free time, being his own boss but it was time to start thinking towards retirement. The real estate investments that he had made over the last 15 years had paid off handsomely. After selling a duplex and a four-unit and paying the association taxes, Seth had $350,000 in the bank and was debt-free. With only 10 years before retirement, Seth wanted to make solid financial decisions that would limit his risk exposure. Fortunately, he had located another property that seemed to meet his needsan older, but well maintained four0unit apartment. The price tag was $250,000, well within his range, and the apartment would require no remodeling. Seth figured he could invest the other $100,000, and between the two hoped to have $1 million to retire on by age 55. After looking at the results from questions 1 and 2, Seth realizes that a 2% return in a certificate of deposit will never allow him to reach his goal of $1 million in 10 years. Presuming his apartment will indeed be worth $400,000 in 10 years, computer the future value of Seths $100,000 investment using a 10% return compounded semiannually for 10 years. DO NOT USE TABLE/CHART. ONLY USE FORMULAS. DO NOT ROUND UNTIL FINAL ANSWER. Answer in Blank#1 with units to the correct power, round to the nearest hundredths, and no spaces (Example: 27.23gal/min, 18yd, 22.17yd^2, 727.98yd^3, 30.93%, etc.) After looking at the results from questions 1 and 2, Seth realizes that a 2% return in a certificate of deposit will never allow him to reach his goal of $1 million in 10 years. Presuming his apartment will indeed be worth $400,000 in 10 years, computer the future value of Seths $100,000 investment using a 15% return compounded semiannually for 10 years. DO NOT USE TABLE/CHART. ONLY USE FORMULAS. DO NOT ROUND UNTIL FINAL ANSWER. Answer in Blank#2 with units to the correct power, round to the nearest hundredths, and no spaces (Example: 27.23gal/min, 18yd, 22.17yd^2, 727.98yd^3, 30.93%, etc.) After looking at the results from questions 1 and 2, Seth realizes that a 2% return in a certificate of deposit will never allow him to reach his goal of $1 million in 10 years. Presuming his apartment will indeed be worth $400,000 in 10 years, computer the future value of Seths $100,000 investment using a 20% return compounded semiannually for 10 years. DO NOT USE TABLE/CHART. ONLY USE FORMULAS. DO NOT ROUND UNTIL FINAL ANSWER. Answer in Blank#3 with units to the correct power, round to the nearest hundredths, and no spaces (Example: 27.23gal/min, 18yd, 22.17yd^2, 727.98yd^3, 30.93%, etc.) Will any of these rates of return allow him to accomplish his goal of reaching $1 million by age 55? Answer in Blank#4 "Yes" or "No" Which return percentage will accomplish his goal? Answer in Blank#5 either "10%", "15%", or "20%". Question 3 options: Blank # 1 Blank # 2 Blank # 3 Blank # 4 Blank # 5

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Finance questions