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Mary Kate, Ashley, Dakota, and Elle each want to buy a new home. Each needs to save enough to make a 20% down payment. For
Mary Kate, Ashley, Dakota, and Elle each want to buy a new home. Each needs to save enough to make a 20% down payment. For example, To buy a $100,000 home, a person would need to save $20,000. At the end of each year for five years, the women make the following investments:
Person | Annuity Payment | Type of Account | Expacted Annual Return | |
---|---|---|---|---|
Mary Kate | $2,200 | Savings | 2% | |
Ashley | $3,200 | CDs | 4% | |
Dakota | $4,200 | Bonds | 6% | |
Elle | $4,200 | Stocks | 12% |
What is the maximum amount each woman can spend on a home, assuming she uses her accumulated investment account to make a 20% down payment?
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