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?
A)About 12%
B)About 13%
C)About 9%
D)About 10%

Question

Quizplus · Accepted Answer

To find the required annual return, we use the future value formula: FV = PV * (1 + r)^n. Here, FV = $150,000, PV = $50,000, and n = 10 years. Solving for r gives approximately 12%.

Kathy Has $50,000 to Invest Today and Would Like to Determine