Let's see how leverage works in real estate investments. if you compare the answer on this question to the previous question where there was no leverage, you will quickly see why people can make so much money in real estate by taking some big risks. you buy a property for $200,000. you pay $20,000 in cash and borrow $180,000 interest free! at the end of the year, you sell the property for $240,000. what is your gain and return on investment?

gain on sale 40,000

RoI 200%

Explanation:

The gain will be:

sales - cost = gain

  240,000 sales price

- 200,000 cost

   40,000 gain

If the loan generate interest, those interest should be subtracted.

return on investment

the loan is not part of the investment, only the 20,000 you invest is consider.

40,000/20,000 = 200%

The equation is y = $72.99 + $28.45(x - 1), where y is the monthly charge and x is the month in which it is calculated.

Step-by-step explanation:

Step 1; First we need to establish a relation between the difference in costs. For the first month it cost $72.99, during the second month, it costs $101.44 and in the third month, it costs $129.89. Difference in rates

Second months rate - First months rate = $101.44 - $72.99 = $28.45

Third months rate - Second months rate = $129.89 - $101.44 = $28.45.

So for every consecutive month, the charges increase by $28.45

Step 2; Now we develop an equation,

y = $72.99 + $28.45(x - 1), where y is the charge that month and x is the month in which it is calculated.

For x = 1, y = $72.99 + $28.45(1 - 1) = $72.99 + $28.45(0) = $72.99,

For x = 2, y = $72.99 + $28.45(x - 1) = $72.99 + $28.45(2 - 1) = $101.44,

For x = 3, y = $72.99 + $28.45(3 - 1) = $72.99 + $28.45(3-1) = $129.89.

So this is the equation to calculate the cost y the mobile provider charges in month x.