3-8 An investor has $50,000 in a bank account at 7% interest compounded annually. She...
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3-8 An investor has $50,000 in a bank account at 7% interest compounded annually. She can use this sum to pay for the purchase of a plot of land. She expects that in 10 years she will be able to sell the land for $130,000. During that period she will have to pay $2,000 a year in property taxes and insurance. Should she make the purchase? Base your decision on a rate of return analysis and verify your conclusion with future value analysis
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