Suzy wants to buy a house but does not want to get a loan. The average price of her dream house is $500,000 and its price is growing at 5 percent per year
How much should Suzy invest in a project at the end of each year for the next 5 years in order to accumulate enough money to buy her dream house with cash at the end of the fifth year? Assume the project pays 12 percent rate of return.
FV = 500,000(1.05)5 = $638,141
PV= 0, I=12, N=5, FV=638,141, CPT PMT = $100,450
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Fill in the blank(s) with the appropriate word(s).
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