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Inflation problem help needed!

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  • BeanCounter
    replied
    Originally posted by yok10001 View Post
    Hello everyone,

    Here is the problem I am having a problem to solve...

    "Justin invests $10,000 per month for five years at 6.00% effective with the first payment made immediately.
    He used the accumulated value of the investment to purchase a house.
    If inflation is 3% per year, what is the current value of the house he would purchase assuming houses appreciate at the inflation rate?"

    I tried first to get the real interest rate and convert to i(12)/12 but my answer was not on the answer list.
    How would you guys approach this problem?

    Thank you
    Please show your step. So people know what mistake(s) you have made.

    Moreover, "Justin invests...." This is present tense. However, he "used" that amount of money to buy a house. Your question does not make sense.
    Last edited by BeanCounter; May 28 2012, 01:46 AM.

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  • yok10001
    started a topic Inflation problem help needed!

    Inflation problem help needed!

    Hello everyone,

    Here is the problem I am having a problem to solve...

    "Justin invests $10,000 per month for five years at 6.00% effective with the first payment made immediately.
    He used the accumulated value of the investment to purchase a house.
    If inflation is 3% per year, what is the current value of the house he would purchase assuming houses appreciate at the inflation rate?"

    I tried first to get the real interest rate and convert to i(12)/12 but my answer was not on the answer list.
    How would you guys approach this problem?

    Thank you
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