Question

Kathy has $50,000 to invest today and would like to determine whether it is realistic for her to achieve her goal of buying a home for $150,000 in 10 years with this investment. What return must she achieve in order to buy her home in 10 years?

Answer 1

Answer:

So she must achieve about 11.61 %

Explanation:

Amount invest by Kathy = $50000

She wanted to buy a home for $150000

Time of investment = 10 years

We have to find the return which she received

Let she receives x return

So according to question $50000\times (1+x)^{10}=150000$

$(1+x)^{10}=3$

$(1+x)=3^{0.1}$

$(1+x)=1.1161$

$x=0.1161=11.61%$

So she must achieve about 11.61 %