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allochka39001 [22]
3 years ago
5

Rob and Lori purchased a home for $350,000 with an additional $5,000 in related purchase costs and then added a garage at a cost

of $25,000. They sold the home for $450,000 and paid $28,000 in selling costs. How much was the gain on the sale of their home
Business
1 answer:
Aliun [14]3 years ago
6 0

Answer:

Profit = $42,000

Explanation:

Given:

House price = $350,000

Additional price = $5,000

Garage value = $25,000

Selling price = $450,000

Selling cost = $28,000

Total cost of the Assets

Purchase Home                       $350,000

Add: Additional Purchase       $5,000

<u>Add: Purchase of Garage       $25,000</u>

Total cost of the Assets          $380,000

Profit = Sale Price - (Cost Price + Selling Cost)

Profit = $450,000 - ( $380,000 + $28,000)

Profit = $450,000 - $408,000

Profit = $42,000

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<u>Full question:</u>

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Answer:

The independent cases not given in the question are:

a. Case A: Market interest rate (annual): 4 percent.  

b. Case B: Market interest rate (annual): 6 percent.  

c. Case C: Market interest rate (annual): 8.5 percent.

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=pv(rate,nper,pmt,fv)

rate is the market interest given in the three cases divided by since the bond is a semi-annual interest paying bond. for example 4%/2=2%

nper is the time to maturity multiplied by 2  i.e 10*2=20

pmt is the coupon  interest receivable by investor semi-annually which is 6%/2*$501,500=$15045

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at 6%

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=pv(4%,20,15045,501500)

=$433,344.51

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