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.

Question

If you want to maximize your return, after how many years should you sell the house? Report your answer to 1 decimal place.

years= ?

Answer 1

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

Answer 2

it is wrong..

Answer 3

remember in weeks

Answer 4

In other words divide by 52

Answer 5

sorry, icant understand

Answer 6

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