A house which you could rent for $10 a year and sell for $110 a year...
Homework Answers
PV = 100
Rate of return = r
FV = 110
rent = 10 , time period = 1 year
(Rent is assumed to be paid at the end of the year)
100 = 10/(1 + r) + 110/(1 + r)
r = 20%
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