Carrie grandfather owns a farm. The farm earned $750,000 this year. The profits are expected to grow at 4.5% per year forever. What the value of the farm if the discount rate is 14.75%? What is the expected selling price of the farm next year? How much did the farm appreciate (as a percent)? %

How much should you pay for land that has an income of $307/acre, annually, if the interest rate is 9.1%?

You are selling off some of your older business equipment and expect to receive $9,000.  You plan on investing it at 5% interest rate, compounded monthly, for 2 years.  What is the future value of the investment after 2 years?

A couple purchased their home for $280,000. They signed a 30 year mortgage at 5.28% interest compounded monthly. What is the monthly payment and the total amount of interest paid on this loan? If the couple puts 20% down towards the purchase of the house listed above, what is the new monthly payment and the total amount of interest paid on this new loan? How much money is saved per month and how much interest is saved?

Calculate the Present Value given the following: Jack invests $5,000 at the end of year 1, and every year increases his investment amount by $1000 for 5 years.  Interest = 4%.  N = 5

Ten years ago Alexander bought an investment property for $100,000.00. Over the 10-year period inflation has held consistently at 2% annually. If Alexander expects a 15%/yr real rate of return, what would he sell the property for today?

Suppose that you invest $50,000 into a downpayment on a $250,000 house, which has a price appreciation of 3% per year. Your mortgage is fixed at $ 36,000 per year, and your tenants pay you $24,000 per year. Property taxes, maintenance, and other expenses cost $5,000 per year. Suppose that after 25 years, you sell your property. Would it have been better to invest $ 50,000 in the stock market, assuming it has returns of 9% per year over the same time period (25 years)? Why? Show your calculations and justify your answer. For the purposes of this question, suppose that inflation is zero.

5. Kristie owns a perpetuity which pays $12,000 at the end of each year. She comes to youand offers to sell you all of the payments to be received after the 10th year. What is themaximum amount that you should offer her if the required return is 8%?