Answer:
Billy Dan and Betty Lou have to invest $11,551 each year to purchase their dream home at the end of 12 years
Explanation:
The requirement of this is missing, that is provided below
How much will Billy Dan and Betty Lou have to invest each year to purchase their dream home at the end of 12 years? Assume an interest rate of 10 percent.
Use the following formula to calculate the amount of yearly investment.
Cost to purchase the house = Annual investment x ( 1 + Interest rate )^numbers of years ) - 1 ) / interest rate
Where
Cost to purchase the house = $247,000
Interest rate = 10%
Numbers of years = 12 years
Annual investment = ?
Placing values in the formula
$247,000 = Annual investment x ( 1 + 10% )^12 ) - 1 ) / 10%
$247,000 = Annual investment x 21.384284
Annual investment = $247,000 / 21.384284
Annual investment = $11,550.54
Annual investment = $11,551
Hence, they have to invest $11,551 each year to be able to purchase the house for cash in 12 years.
