2. Suppose that you own real estate whose market value will be V(t) dollars t years from now on.2-1) If the interest rate (r) remains constant over this period, t, what is the corresponding timestream of present value of the real estate you own?2-2) What is the the optimal time to to sell your real estate given the time stream of present value?2-3) Discuss the economic implications you learned from your answer to 2-2).

Suppose we own a real estate property whose market value changes as time passes. Let V(t) be the…

Answered: 2. Suppose that you own real estate…

Advanced Engineering Mathematics

10th Edition

ISBN:9780470458365

Author:Erwin Kreyszig

Publisher:Erwin Kreyszig

Chapter2: Second-order Linear Odes

Section: Chapter Questions

Problem 1RQ

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ome m/mod/quiz/attempt.php?attempt%3D199758&cmid=D11765&page%3D5 atics for Business and Economics(1) se 'Mathematics for Business and Economics(1) A principal of $300 is invested at 7% for 1 year Determine the future value if the interest is compounded (i) Annually S (1) Semi Annually $ (I) quarterly $ age Next pa rch Bb
Assn #3 Pg 13 (1-10) And Works x em/?file=https://drive.google.com/uc?id%3D1CTEVTWK8MB4C_mgM7cZiHsSSPeOAZ 10&export%3Ddownload&filename%3DAttachment:%20PDF:%2 9. The balance in a bank account with an annual interest rate of 2%, compounded annually, can be represented using the function f(t) = 1000(1.02), where t is the time in years after opening the %3D 1 account. What was the approximate account balance 6 years and 3 months, or 6- years, after 4 the account was opened?
2. (2 pts) At an effective annual interest rate i, you are given: (a) the present value of an annuity-immediate with annual payments of 1 for n years is 40; and (b) the present value of an annuity-immediate with annual payments of 1 for 3n years is 70. Calculate the accumulated value of an annuity-immediate with annual payments of 1 for 2n years. Solution:
Example 13: Calculate the present value of the stock from the following formula: A stočk is expected to expeirience supernormal growth in dividend of 10 percent, gi over the next five years. ii) Following this period, dividends are expected to grow at ä constant rate of 4 percent, g. iii) The stock paid a dividėnd of 74 last year. iv) The required rate of return on the stock is 15%. i)
4. An insurer issues a 15-year annual premium-due endowment insurance of $100,000 benefit to life (50). The insurer charges an initial expenses of $ 1000 plus renewal expenses of 5% of each subsequent premium after the first premium payment. The premiums are made at the beginning of each year when (50) remains alive before reaching 70 and the benefit is paid at the end of K50 +1 years or when the person reaches the age 70 whichever occurs earlier. (a) Write down the gross future loss random variable L in terms of actuarial notations. (b) Calculate the gross premium-due G by using the Standard Select Survival Model with 5 % per year interest (Table D4) and the equivalence premium principle. 8 (c) Calculate the gross premium policy value V by using the equivalence premium G found in (b).
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Solve the problem. 36) Suppose $14,000 is invested with 4% interest for 5 yr under the following compounding 36) options. Complete the table. Compounding Option n Value a. Daily b. Continuously A) B) C) D) Compounding Option n Value| 1 n/a a. Daily b. Continuously Compounding Option In Value| a. Daily b. Continuously Compounding Option In Value| 1 n/a a. Daily b. Continuously Result a. Daily b. Continuously Result $17,033.14 $17,783.62 Result 365 $17,099.45 n/a $17,783.62 Result $17,033.14 $17,099.64 Compounding Option In Value| Result 365 $17,099.45 n/a $17,099.64

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