Determine again the following problem: On January 1, 1965, you purchased a small house in Alameda, California for $20,000. On January. 1, 2015, you sold house for $900,000.
Suppose that a bundle of goods deemed representative of cost of living as of Jan. 1, 1965 is valued as $100. Suppose that a similar bundle of goods deemed representative of the cost of living as of Jan. 1, 2015 is $525. Using these bundles of goods to determine an inflation rate, calculate the real annual rate of return on the investment in the house?