Question
Ms. Brown is considering buying a house and renting it to people. The yearly operating costs are $2,500. The house can be sold for
Ms. Brown is considering buying a house and renting it to people. The yearly operating costs are $2,500. The house can be sold for $335,000 at the end of 10 years and it is considered 18% to be a suitable annual effective interest rate. If the house costs $275,000 to purchase, how much would you need to charge your tenants each year in rent? (Assume a single payment for the years rent at the end of each year)
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