Accumulate enough money to buy her dream house with cash

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Reference no: EM131197754

Mary wants to buy a house but does not want to get a loan. Her dream house has an average price of $500,000 and its price is growing at 5 percent per year. How much should Mary invest in a project at the end of each year for the next 5 years in order to accumulate enough money to buy her dream house with cash at the end of the fifth year? Assume the project pays 12 percent rate of return. Explain fully the steps in solving this problem.

Reference no: EM131197754

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