Complete the following case study;
13-3 Future Value/Present Value
At 45 years of age, Seth figured he wanted to work only 10 more years. Being a full-time landlord had a lot of advantages: cash flow, free time, being his own bossâ€”but it was time to start thinking towards retirement. The real estate investments that he had made over the last 15 years had paid off handsomely. After selling a duplex and a four-unit and paying the associated taxes, Seth had $350,000 in the bank and was debt-free. With only 10 years before retirement, Seth wanted to make solid financial decisions that would limit his risk exposure. Fortunately, he had located another property that seemed to meet his needsâ€”an older, but well maintained four-unit apartment. The price tag was $250,000, well within his range, and the apartment would require no remodeling. Seth figured he could invest the other $100,000, and between the two hoped to have $1 million to retire on by age 55.
1. Seth read an article in the local newspaper stating the real estate in the area had appreciated by 5% per year over the last 30 years. Assuming the article is correct, what would the future value of the $250,000 apartment be in 10 years?
Note: Show all work and calculations