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Ms. Balsan's onetime Hamptons home was slated to hit the market priced at $28 million with Tim Davis of the Corcoran Group. The shingle-style home
Ms. Balsan's onetime Hamptons home was slated to hit the market priced at $28 million with Tim Davis of the Corcoran Group.
The shingle-style home was built around 1910. Ms. Balsan, the great-granddaughter of railroad magnate Cornelius Vanderbilt, owned the house until her death in 1954.
According to records, the estate is owned by Robert G. Goldstein, who purchased the house in 2002 for $17.4 million."
- Calculate the annual compound growth rate of the house price during the period when the house was ownedbyGoldstein(since 2002).
- Assume that the growth rate you calculated in question #1 remains the same for the next 30 years. Calculate the price of the house in 30 years after it was soldbyGoldstein.
- Assume that the growth rate you calculated in question #1 remains the same since the house was sold. Calculate the price of the house today.
- Assume the growth rate that you calculated in #1 prevailed since 1910. Calculate the price of the house in 1910.
- Assume the growth rate that you calculated in #1 prevailed since 1910. Calculate the price of the house in 1954.
- You were using the time value of money concept to answer question #5. Think about the time line for that problem. What is the time point 0 in that problem?
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