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Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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![The housing market is crazy right now! Sierra bought her condo for $250,000, 5 years ago. She
paid a down payment of 10% of the cost of the house and took out a 30 yr. loan at 3.125% for
the rest which she has been paying in monthly payments. Sierra realizes that she could sell her
condo for $320,000 today. If she sells the condo she will first pay off what ever she still owes on
the loan and the rest is hers to keep. What would her annual IRR be over the 5 years she
owned the condo if she sells the condo today for $320,000 and she considers all of the amount
she keeps to be profit?](https://content.bartleby.com/qna-images/question/8664a586-1228-418f-9b40-2c60c772cd51/162c1178-6bb9-4dd1-9b5e-57b54472e83c/8n2prq_thumbnail.png)
Transcribed Image Text:The housing market is crazy right now! Sierra bought her condo for $250,000, 5 years ago. She
paid a down payment of 10% of the cost of the house and took out a 30 yr. loan at 3.125% for
the rest which she has been paying in monthly payments. Sierra realizes that she could sell her
condo for $320,000 today. If she sells the condo she will first pay off what ever she still owes on
the loan and the rest is hers to keep. What would her annual IRR be over the 5 years she
owned the condo if she sells the condo today for $320,000 and she considers all of the amount
she keeps to be profit?
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