Question
You are considering making an investment in a real estate limited partnership which will cost you $25,000 today. The general partner has promised all investors
You are considering making an investment in a real estate limited partnership which will cost you $25,000 today. The general partner has promised all investors a 12% return over the seven-year life of the partnership. They plan to begin selling properties and distributing cash flow in year three. They expect to pay investors 10% of their investment at the end of years three and four; 20% of their investment in years five and six. How much will the general partner distribute in year 7 in order to meet the 12% return expectation?
Please explain how to solve this.
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