The payment in six years will be $ (Round the final answer to the nearest dollar as needed. Round all intermediate values to six decimal places as needed.)
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E4
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- You have just won a lottery prize of $1,000,000 collectable in 10 yearly installments of $100,000 starting today. The total present worth of the prize is $665,270. Suppose that you have a large mortgage you want to pay off now. You propose an alternative but equivalent payment scheme. You would like $420,000 today and the balance of the prize in four years when you intend to purchase a large piece of waterfront property. How much will the payment be in four years? Assume that annual interest is 10 percent, compounded monthly. The payment in four years will be $. (Round the final answer to the nearest dollar as needed. Round all intermediate values to six decimal places as needed.)You just won a lottery that promises to pay you $1 million exactly 10 years from today. Because the $1 million payment is guaranteed by the state in which you live, opportunities exist to sell the claim today for an immediate lump-sum cash payment. What is the least you will sell your claim for if you could earn 5.05 % on similar-risk investments during the 10-year period?Suppose a property you are seeking to purchase is valued at $200,000. You can take out a loan of 80 percent from the bank, which amortizes in 30 years. The current market interest rate is 7.35 percent. Suppose you can only afford a monthly payment of USD 900, but the seller is desperate to sell this property. The seller has already lowered the selling price to USD 180,000. What is the minimum amount of rebate that the seller should provide to you in order to make you purchase the property?
- 2. You plan to purchase an office space in Chamblee's Chinatown for $50,000 at the end of year 2021. You estimate that by renting out that office space, you will receive a stream of rental income for the coming eight years at the end of each year as shown in below. After eight years, you estimate that you can still sell the office space for $45,000 at the end of the eighth year. Is this project a good investment if you project that the normal rate of return in this line of business is 12%? How about if the general rate of return is 15% ? 8%? Year 1 $6,000 Year 5 $7,500 Year 2 $6,500 Year 6 $8,500 Year 3 $7,000 Year 7 $8,500 Year 4 $7,500 Year 8 $8,500 3. Based on the information provided in Step 2 above, compute the Internal Rate of Return for the investment. 4. While you were waiting for your first job interview results to come, you spent several dollars to buy a Georgia Educational Lotto and were lucky enough to win a $1 million prize. The prize is to be awarded in 20 annual payments…Assume that you just inherited an annuity that will pay you $10,000 per year for 10 years, with the first payment being made today. A friend of your mother offers to give you $60,000 for the annuity. If you sell it, what rate of return would your mother’s friend earn on his investment? If you think a “fair” return would be 6%, how much should you ask for the annuity? What keys do I need to enter in a financial calculator to get the answers of (13.70%, $78,016.92)/ only show me the keys to enter in a financial calculaotr. not excel and not algebraYou are thinking about buying a real estate property. If you buy the property, you think you will sell it for $829826 in 13 years. If your required return on investments of this risk is 16.17%, what is the most that you should be willing to pay for the property? Round to 2 decimal places. Include a dollar sign ($) or percent (%) as appropriate.
- You are considering the purchase of a property today for $400,000. You plan to finance 60.00% of the purchase price with a loan. The appreciation rate on the property value is expected to be 5.00% annually for the next three year Calculate the EAHE. please work it out in excelYou just won the Florida lottery. To receive your winnings, you must select ONE of the twofollowing choices:1. You can receive $1,000,000 a year at the end of each of the next 30 years.2. You can receive a one-time payment of $15,000,000 today.Assume that the current interest rate is 6%. Which option is most valuable?You are looking to invest in a real-estate property to rent out that will cost $100,000. The property is expected to produce annual rent cash flows of $9,000 in Year 1, $7,400 in Year 2, and $8,800 in Year 3, at which point you will sell the property for $91,000.00, if your bank quotes you a mortgage rate of 5.25% per year what is the dollar return you can expect on your investment? Additionally, should you buy the property? a. 2,911.06, do not buy the property b. -$787.99 buy the property c. 787.99, buy the property d. -2,911.06, buy the property
- Assume that you are about to sell property (a vacant parcel of real estate) you own but otherwise have no use for. The net-of-sales-commission selling price for the property is $500,000. You are willing to finance this transaction over a 20-year period and have told the buyer that you expect a 12% pretax return on the transaction. The buyer has asked you for a payment schedule under several alternatives. Required: 1. What will be your periodic cash receipt, to earn a 12% return, if payments are received from the purchaser: NOTE: to answer the above questions, use the PMT function in Excel, as follows: PMT(rate,nper,pv,fv,type) where: rate is the interest rate for the loan, nper is the total number of payments, pv is the present value (i.e., the total amount that a series of future payments is worth now; also known as the principal), fv is the future value (or a cash balance you want to attain after the last payment is made; if fv is omitted, it is assumed to be 0 (zero)), and…You have an opportunity to purchase a piece of vacant land for $30,000 cash. If you plan to hold it for 15 years and then sell it at a profit. During this period, you would have to pay annual property taxes of $600 and have no income from the property. Assuming that you would want a 10% rate of return from the investment, a) Draw a cashflow diagram. b) What net price would you have to sell it in the next 15 years?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?