Sharon is 18 and would like to buy a house when she is 34. what is the discount factor for today's prices if the housing values increase 7% per year? a. 12.0% * i think maybe this one. b. 14.29% c. 33.9% d. 66.1%

Solution:

we are given that

Sharon is 18 and would like to buy a house when she is 34.

it mean

we have been asked to find the discount factor for today's prices if the housing values increase 7% per year?

It mean

As we know that

Let current price be 100, then the future price will be

Hence the discount factor is

Hence the correct option is 33.9%.

.632

step-by-step explanation:

6 * 1/10 = 3/5

3*0.01 = 0.03

3/5 + 0.03 = .63

2*0.002 = .002

.63 + 0.002 = .632