You Decide to Move to the Mountains of Colorado and Want

question 84

Multiple Choice

You decide to move to the mountains of Colorado and want to know what would be a good offering price on a home, but you know you will only own it a year. Fortunately, you are armed with the simple residential investment equation. You have the following information: the real interest rate is 4 percent; the depreciation rate of homes is 5 percent; average rent is $1,000; there is no expected capital gain; and you will have a 20 percent down payment. You offer the owner, rounding to the nearest dollar:

• A) $25,000.
• B) $125,000.
• C) $4,167.
• D) $17,241.
• E) $50,000.

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Definitions:

State Contracts

Agreements entered into by government entities for the procurement of goods and services, subject to specific regulatory and legal frameworks.

Construction Company

A business entity involved in the building of structures, infrastructures, and related activities.

Prior Probability

The probability of an event or outcome before new data is taken into account, used in Bayesian analysis.

Event

A happening or occurrence, often significant in the context it is mentioned.