Please answer with explanation.I will really upvote. Thanks A couple purchases a home in 1995 for $45,000 andfinds that today in 2017 it is worth $95,000. Theyconsider this a very good investment of their moneysince they more than doubled their money. Are thecorrect? What rate did they earn compoundedannually?Explain how you calculated this and why you thinkthey are correct/incorrect.(Consider that inflation averages about 3% a yearwhen deciding if this is a good investment or not. Also,to make the calculation less complicated, assume thatthe date of purchase in 1995 was about the same dateas today's date - i.e, no need to consider partialyears.)

A couple purchases a home in 1995 for $45,000 and finds that today in 2017 it is worth $95,000. They consider this a very good investment of their money since they more than doubled their money. Are the correct? What rate did they earn compounded annually?

A couple purchases a home in 1995 for $45,000 and finds that today in 2017 it is worth $95,000. They consider this a very good investment of their money since they more than doubled their money. Are the correct? What rate did they earn compounded annually?

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter7: Losses—deductions And Limitations

Section: Chapter Questions

Problem 20P: Carlos opens a dry cleaning store during the year. He invests 30,000 of his own money and borrows...

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Question

Please answer with explanation.

I will really upvote. Thanks

A couple purchases a home in 1995 for $45,000 and
finds that today in 2017 it is worth $95,000. They
consider this a very good investment of their money
since they more than doubled their money. Are the
correct? What rate did they earn compounded
annually?
Explain how you calculated this and why you think
they are correct/incorrect.
(Consider that inflation averages about 3% a year
when deciding if this is a good investment or not. Also,
to make the calculation less complicated, assume that
the date of purchase in 1995 was about the same date
as today's date - i.e, no need to consider partial
years.)

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