Certain unimproved city lots is under consideration

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The purchase of certain unimproved city lots is under consideration. The price is $20,000. The owner of this property will pay annual propert taxes of $400 the first year; it is estimated that these taces will increase by $40 each year thereafter. It is believed that if this property is purchased, it will be necessary for the investor to wait for 10 years before it can be sold at a favorable price.

What must the selling price be in 10 years for the investment to yield 15% per year before income taxes?

Reference no: EM131831706

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