Rate of return

Scicaster

New member
Joined
Aug 16, 2020
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Hello,

If I make an investment of $50,000 in a condo and 3 years later sell it for $105,000 what is my annual rate of return? I have already accounted for expenses, capital gain taxes, HOA dues, selling commission, etc. Thanks

Scicaster
 

Subhotosh Khan

Super Moderator
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Jun 18, 2007
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22,491
Hello,

If I make an investment of $50,000 in a condo and 3 years later sell it for $105,000 what is my annual rate of return? I have already accounted for expenses, capital gain taxes, HOA dues, selling commission, etc. Thanks

Scicaster
What is the equation that would give you the improved value of your investment (A) after 'n' years with an yearly interest of 'r'.

Please show us what you have tried and exactly where you are stuck.

Please follow the rules of posting in this forum, as enunciated at:


Please share your work/thoughts about this problem.
 

Scicaster

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Aug 16, 2020
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Sorry, I thought I could just ask a question. I'm thinking $105k-$50k = a profit of $55k divided by 3 years = 18% per year rate of return.
 

Subhotosh Khan

Super Moderator
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Messages
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Sorry, I thought I could just ask a question. I'm thinking $105k-$50k = a profit of $55k divided by 3 years = 18% per year rate of return.
In a previous post, you had indicated that you and your husband are recent retiree (like me) - and NOT working this problem for any class. So I am going to give the answer. If the interest rate is 'r (%)' and if you consider compounding:

\(\displaystyle r \ = \ \sqrt[3]{2.1} \ - \ 1\) = 28.06%

Rule of 72 tells me that I am most probably correct.
 
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