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- 2. Calculate the present value to purchase a lot of land if $18,000 is put down and $2,000 is paid per quarter for 5 years. Assume that there is 6% interest that is compounded quarterly if the cash price for the land is $25, 000, is it better to pay cash or finance the purchase? According to the Present Value of an Annuity Table, at 1.5% interest for 5 years, the factor is 17.16864. $52, 337.28; it is better to pay $25,000 cash $4, 782.64, it is better to finance the purchase $27, 565,28; it is better to pay $25,000 cash O $22,782.64; it is better to finance the purchase gb2How much would you pay for an asset that costs you 10,000 for each of four years in a row (starting right now) and pays off with a benefit of 2,000 every year after that forever. Assume interest rate of 0.07%You purchase a home for $207,000 that you expect to appreciate 8% in value on an annual basis. How much will the home be worth in ten years? Factors to use for n=10, I =8% (DO NOT USE ANY OTHER FACTORS OR EQUATIONS)Future Value of $1 2.15892 Future Value of an Annuity of $1 14.48656Present Value of $1 0.46319Present Value of an Annuity of $1 6.71008
- When purchasing a $210000 house, a borrower is comparing two loan alternative. The first loan is a 90% loan at 10.25% for 25 years. The second loan is an 85% loan for 9.75% over 15 years. Both have monthly payments and the property is expected to be held over the life of the loan. What is the incremental cost of borrowing the extra money? A. 20.25% B. 16.17% C. 11.36% D. 12.42% Please show all stepsSuppose you wish to borrow Php 20,000,000 to buy a parcel of real estate. The lender is willing to lend the money at 10% per annum. Amortize the payments monthly over 10 years. AF: 0.0132150737,H5. A person has a property that they want to sell, and they need to know the present value of the following options: (for both options consider a rate of 21.6%) a. Advance payments of $25,000 every six months for 5 years b. Payments of $9,000 quarterly for 4 years and a final payment of $20,000 nine months after the last deposit
- A person buys a piece of property for P100,000 down payment and ten deferred semi-annual payments of P8,000each starting three years from now. What is the present value of the investment if the rate of interest is 12% compounded semi-annually? What is the corresponding value if ten deffered semi annual payments of 8,000 are made starting three years from now? A. 100,000 B. 43,999.08 C. 8,0003. You wish to purchase a land worth P750,000 and the seller requires 20% downpayment. Then you will loan the balance from a bank that charge 6% annual interest rate to be paid for 1 year. a. How much is the monthly amortization? b. How much is the total interest?You took out a loan 10 years ago that had the following terms. Amount $1,200,000, rate 5.5% and 30 year amortization. You are looking to refinance the existing balance. What is your rate of return on cost if your refinance fees equal 5% of the refinance amount, the new rate is 3.5% with 240 months and you anticipate that you will only be in the house for the next five years. What is your effective cost of borrowing?
- How much would you invest today in order to receive $30,000 in each of the following (for further Instructions on present value In Excel, see Appendix C): A. 10 years at 9% B. 8 years at 12% C. 14 years at 15% D. 19 years at 18%#1) Time value: Annuities Marian Kirk wishes to select the better of two 10-year annuities,C and D. Annuity C is an ordinary annuity of $2,500 per year for 10 years. AnnuityD is an annuity due of $2,200 per year for 10 years.a. Find the future value of both annuities at the end of year 10 assuming that Mariancan earn (1) 10% annual interest and (2) 20% annual interest.c. Find the present value of both annuities, assuming that Marian can earn (1) 10%annual interest and (2) 20% annual interest. #2) Retirement planning Hal Thomas, a 25-year-old college graduate, wishes to retire atage 65. To supplement other sources of retirement income, he can deposit $2,000each year into a tax-deferred individual retirement arrangement (IRA). The IRA willearn a 10% return over the next 40 years.a. If Hal makes annual end-of-year $2,000 deposits into the IRA, how much will hehave accumulated by the end of his sixty-fifth year?b. If Hal decides to wait until age 35 to begin making annual end-of-year…A borrower is purchasing a property for $1,800,000 and can choose between two possible loan alternatives. The first is a 75% loan for 25 years at 9% interest and 1 point and the second is an 80% loan for 25 years at 9.25% interest and 1 point. Assume the loan term will be 5 years. What is the incremental cost of borrowing the extra money?
