Mr. Fish wants to build a house in ten years. He estimates that the total cost will be $150,000. If he can put aside $10,000 at the end of each year, what rate of return must he earn in order to have the amount needed?
A) Between 8% and 10%
B) Between 6% and 8%
C) Above 10%
D) Between 4% and 6%

Question

Quizplus · Accepted Answer

FV_IFA= FV_A (App. C: 10 periods)/A FV_IFA= $150,000/10,000 = 15.0 Rate of return = between 8% to 10% on the future value of an annuity table.

Mr Fish Wants to Build a House in Ten Years