On January 1, Pete Rowe bought a ski chalet for $51,000. Pete is renting the chalet...

Transcribed Image Text:

On January 1, Pete Rowe bought a ski chalet for $51,000. Pete is renting the chalet for $55 per night. He estimates he can rent the chalet for 190 nights. Pete's mortgage for principal and interest is $448 per month. Real estate tax on the chalet is $500 per year. Pete estimates that his heating bill will run $60 per month. He expects his monthly electrical bill to be $20 per month. He pays $12 per month for cable television. a. What is Pete's return on the initial investment for this year? (Round your answer to the nearest tenth percent.) Pete's return % b. Assume rentals drop by 30% and monthly bills for heat and electricity drop by 10% each month. What would be Pete's return on initial investment? (Round your answer to the nearest tenth percent.) Pete's return % On January 1, Pete Rowe bought a ski chalet for $51,000. Pete is renting the chalet for $55 per night. He estimates he can rent the chalet for 190 nights. Pete's mortgage for principal and interest is $448 per month. Real estate tax on the chalet is $500 per year. Pete estimates that his heating bill will run $60 per month. He expects his monthly electrical bill to be $20 per month. He pays $12 per month for cable television. a. What is Pete's return on the initial investment for this year? (Round your answer to the nearest tenth percent.) Pete's return % b. Assume rentals drop by 30% and monthly bills for heat and electricity drop by 10% each month. What would be Pete's return on initial investment? (Round your answer to the nearest tenth percent.) Pete's return %

Answer rating: 100% (QA)

To calculate Petes return on the initial investment for this year we need to determine his net renta... View the full answer