(Rate of return) After graduation, Adrian moved across the country to Brownville and bought a small house for $208,000. Bill moved to Columbus and bought a house for $195,000. Four years later, they both sold their houses. Adrian netted $256,000 when she sold her house and Bill netted $168,000 on his.
1. What annual rate of return did Adrian realize on her house?
2. What annual rate of return did Bill realize on his house?
1. What is the present value discounted at 10%?© BrainMass Inc. brainmass.com June 4, 2020, 12:48 am ad1c9bdddf
Use the compound interest formula to calculate the annual rate of return.
The formula is
FV = PV (1+rate)^n
FV = final price
PV = initial price
rate = annual rate of return
n = ...
The solution explains the calculation of rate of return and PV and FV of annuity.