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Homework answers / question archive / London purchased a piece of real estate last year for $84,900
London purchased a piece of real estate last year for $84,900. The real estate is now worth $100,900. If London needs to have a total return of 0.24 during the year, then what is the dollar amount of income that she needed to have to reach her objective? Round to two decimal places.
Total return=(End value-Beginning value+Income)/Beginning value
Given,
Total return= 0.24
Ending value= 100900
Beginning value= 84900
Put the values in the formula;
0.24= (100900- 84900+ Income)/ 84900
0.24= (16000- income)/ 84900
0.24* 84900= 16000- income
Income= 20376- 16000
= 4376
