An investor anticipates that land values for a site will be worth $100,000 in five years. If real estate taxes are expected to be $2,500 each year, how much can the investor pay today for the site and still earn a 15 percent return on his investment?

Intermediate Algebra
19th Edition
ISBN:9780998625720
Author:Lynn Marecek
Publisher:Lynn Marecek
Chapter12: Sequences, Series And Binomial Theorem
Section12.3: Geometric Sequences And Series
Problem 12.57TI: What is the total effect on the economy of a government tax rebate of $1,000 to each household in...
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  1. An investor anticipates that land values for a site will be worth $100,000 in five years. If real estate taxes are expected to be $2,500 each year, how much can the investor pay today for the site and still earn a 15 percent return on his investment?
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