1. 12 years ago, a commercial building was purchased for $30,000. What would the selling price...
1. 12 years ago, a commercial building was purchased for $30,000. What would the selling price be necessary to recover the investment assuming an annual rate of 12% was desired in addition to the investment? (assume annual compounding and no selling costs)
- A) $7,000
- B) $73,000
- C) $120,000
- D) $116,879
Homework Answers
FV = PV ( 1+r)^n
r is annual Rate
n is time gap
= $ 30,000 (1+0.12)^12
=$ 30000 (1.12^12)
= $ 30,000 * 3.8960
= $ 116879
OPtion D is correct.
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