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

So she must achieve about 11.61 %

Step-by-step 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* (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 %