Calculate the annual compound growth rate

Reference no: EM132028106

Question: "Before there was Paris Hilton, there was Consuelo Vanderbilt Balsan - a Gilded Age heiress and socialite, re-nowned for her beauty and wealth. Now Ms. Balsan's onetime Hamptons home is slated to hit the market priced at $28 million with Tim Davis of the Corcoran Group.

Located on Ox Pasture Road in Southampton, the shingle-style home was built around 1900 and is known as "Gardenside" or "Cara-Mia". Ms. Balsan, the great-granddaughter of railroad magnate Cornelius Vanderbilt, owned the house until her death in 1964.

According to public records, the estate is owned by Robert G. Goldstein, executive vice president and president of global gaming operations at Las Vegas Sands Corp, and his wife Sheryl, who purchased the house in 2007 for $17.4 million." (The Wall Street Journal, August 1, 2014, M2)

1. Calculate the annual compound growth rate of the house price during the period when the house was owned by Robert G. Goldstein (since 2007). (Round the number of years to the whole number). Please show your work.

2. Assume that the growth rate you calculated in question #1 remains the same for the next 20 years. Calculate the price of the house in 20 years.Please show your work.

3. Assume the growth rate that you calculated in #1 prevailed since 1900. Calculate the price of the house in 1900. Please show your work.

4. Assume the growth rate that you calculated in #1 prevailed since 1900. Which price was paid for the house in 1964?Please show your work.

5. You were using the time value of money concept to answer the question #3. Think about the time line for that problem. What is the time point 0 in that problem? Please explain your answer.

Reference no: EM132028106

Questions Cloud

What is the amdr for fat in the diet : What is the AMDR for fat in the diet? What was your perception of dietary fat before reading this week's resources?

Identify how these risks might be mitigated : Risk is about creating value while addressing risks in various forms. In a 3-5 page paper address the following: Identify how these risks might be mitigated

Evaluate what is the net return : If you bought the bond for the original price of $828 and sold it 1 year later for the price computed in part (b), then what is the net return?

Analyze the issues and prepare any necessary journal entries : For this assignment, you are required to analyze the issues and prepare any necessary journal entries. In addition, you need to create a log of issues

Calculate the annual compound growth rate : Calculate the annual compound growth rate of the house price during the period when the house was owned by Robert G. Goldstein (since 2007).

Which is the relevant yield for an investor : Paradise Adventures issued 7% coupon bonds with a maturity of twenty years five years ago. The bonds are callable beginning 10 years prior to maturity at 103%.

How you used the ideas from the readings : In addressing remaining employees, your message should explain the bad news and strive to preserve employee morale. Decide whether to use the direct.

What about the smaller ones : This is quite an easy discussion to have for larger companies, but what about the smaller ones? I would love to hear your thoughts on this.

What is the discount rate of stock : It just paid an annual dividend of $1.55 and has an expected growth rate of 3%. What is the discount rate of this stock?

User Account

All Pages