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Four years ago, Ted bought two rental homes for a total of $460,000. Since then, the homes have been increasing in value at a rate of 3. 1% per year. Upkeep on the homes costs Ted $1,430 per year per home, and he rents them out at a monthly rate of $820 each. Both homes have been rented out constantly since Ted bought them. Between revenue gained from renting out the homes and appreciation on the property, which aspect of Ted’s investment has increased in value more, and by how much more has it increased, to the nearest dollar? a. Ted will gain $20,387 more from the appreciation than from the rent. B. Ted will gain $26,107 more from the appreciation than from the rent. C. Ted will gain $7,532 more from the rent than from the appreciation. D. Ted will gain $18,972 more from the rent than from the appreciation.

Respuesta :

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After four years, Ted will gain $18,972 more from the rent than from the appreciation.

We know that the principal investment is the sum of  $460,000.

Each year, the investment appreciates by 3. 1% which gives us;

3.1/100 ×  $460,000 = $14260

In four years = 4 ×  $14260 = $57040

Net profit = $57040 - $1,430 = $55610

The house is on rent where the tenants pay $820 on each home so for the two homes, they pay $1640 each month. In a year they pay $19680 and in four years they pay $78,720. The net profit is $78,720 - $1,430 = $ 77290

Hence after four years, Ted will gain $18,972 more from the rent than from the appreciation.

Learn more about appreciation: https://brainly.com/question/25671575

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