Question

Gen. Robert E. Lee's Boyhood Home is for Sale The historic Virginia home that Confederate Gen. Robert E. Lee grew up in hit the market (in April 2018) for $8.5 million. (Trapasso, C.) Robert E. Lee's father Henry rented the home in 1812, according to The Washington Post. The family lived there for over 80 years, including Robert E. Lee from age five to when he went to West Point in 1825. He again visited five years after the Civil War ended, The Post reported. (Leayman, E.) The home's other claim to fame is that President George Washington also dined and lodged there before the Lee family moved in. (Trapasso, C.) Built in 1795, the brick house was listed on the National Register of Historic Places in 1986. (Trapasso, C.) The home had been used as a residence until 1966. The Stonewall Jackson Memorial Foundation purchased the home and opened it to the public. Unable to make ends meet, the foundation sold the home in 2000 to Mark and Ann Kington for $2.5 million. (Trapasso, C.) The boyhood home of Robert E. Lee in Alexandria was listed on the market with a significant price drop. Previously priced at $8.5 million, the six bedroom is available for $6.2 million (March 2019). (Leayman, E.)

1. Calculate the annual compound growth rate of the house price since the house was sold to Mark and Ann Kington (since 2000) until the house was listed for sale in April 2018. (Round the number of years to the whole number).

2. Assume that the growth rate you calculated in question #1 prevailed since Robert E. Lee's father Henry rented the home in 1812. Calculate the price of the house in 1812. (Round the number of years to the whole number). (TIP: To get the answer correctly you need to use the price of the house in your calculations in dollars with all zeros).

3. Assume the growth rate that you calculated in #1 prevailed since 1795. Calculate the price of the house in 1795. (TIP: To get the answer correctly you need to use the price of the house in your calculations in dollars with all zeros).

4. Assume that the growth rate you calculated in question #1 remains the same until the Stonewall Jackson Memorial Foundation purchased the home in 1966 and opened it to the public. Calculate the price of the house in 1966. (Round the number of years to the whole number). (TIP: To get the answer correctly you need to use the price of the house in your calculations in dollars with all zeros).

4. The home had been used as a residence until 1966. The Stonewall Jackson Memorial Foundation purchased the home in 1966 and opened it to the public. Unable to make ends meet, the foundation sold the home in 2000 to Mark and Ann Kington for $2.5 million. Calculate annual compound growth rate The Stonewall Jackson Memorial Foundation received.

6. In 2018, the listed price of the house was $8.5 million. In 2019 the price was reduced to $6.5 million. Calculate the compound rate of this reduction in price. (Round the number of years to the whole number).

Answer 1

As per rules I am answering the first 4 subparts of the question

1	FV	8500000
	PV	2500000
	N	18
	Rate	7.04%
2	Rate	7.04%
	FV	8500000
	N	206
	Price in 1812	$7.03
3	Rate	7.04%
	FV	8500000
	N	223
	Price in 1795	$2.21

4	Rate	7.04%
	FV	8500000
	N	52
	Price in 1966	$247,762.39

Workings