Asked by Who
Say you buy an house as an investment for 300000$ (assume that you did not need a mortgage). You estimate that the house will increase in value continuously by 37500$ per year. At any time in the future you can sell the house and invest the money in a fund with a yearly interest rate of 5.5% compounded weekly.
If you want to maximize your return, after how many years should you sell the house? Report your answer to 1 decimal place.
years= ?
If you want to maximize your return, after how many years should you sell the house? Report your answer to 1 decimal place.
years= ?
Answers
Answered by
Damon
37500 /52 weeks = 721.154 per week increase in value
keep for x weeks
V = 300,000 + 721.154 x
interest rate r = .055/52 = 0.001057
when is interest per week equal to increase in value per week?
interest per week = 0.001057 V
so
0.001057 ( 300,000 + 721.154 x) = 721.154
keep for x weeks
V = 300,000 + 721.154 x
interest rate r = .055/52 = 0.001057
when is interest per week equal to increase in value per week?
interest per week = 0.001057 V
so
0.001057 ( 300,000 + 721.154 x) = 721.154
Answered by
Who
it is wrong..
Answered by
Damon
remember in weeks
Answered by
Damon
In other words divide by 52
Answered by
Who
sorry, icant understand
Answered by
Damon
I did it in weeks because your interest was weekly
However you want the answer in years
so divide the number of weeks by 52
However you want the answer in years
so divide the number of weeks by 52
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