Which of the following is an advantage of rent (over home ownership) O a. Household stability b. Lifestyle expression O c. Greater mobility (i.e. easier to move) O d. You can borrow against the money you've paid in rent Clear my choice
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- Assume that the price of real estate is determined by P=PV(all cash flows generated by the real estate). After you have graduated you work for some years and can save some money. You decide to invest in a house which you want to rent out for a rate of 12,000 pound per month. Assume that the rental rate will increase with 1.2% per year (which is 0.1% per month). (For the sake of simplicity, also assume that there are no further costs involved e.g. renovating or repair). a) As the market risk of renting out the house is low, you think that a discount rate of 5.5% (APR with monthly compounding) would be appropriate. What is the price of the house under the assumption that the cash flows from rent will last forever? b) If discount rate is 1% lower than 5.5% what is the price of the house? c) You want to make the valuation of the house more realistic by assuming that the time horizon for the valuation should be 50 years. Again, you assume that the house will generate SEK 12,000 rental…A guy is wondering which account he should invest in Account A- earns an APR of 4% of compunded monthly Account B- intrest is compunded daily, and the effective annual rate is 4%(APR is unknown) In Account B the 4% is an effective annual rate does this mean Account B is better if money is left in there for one year? If the money is left in there for 1 or more year does it make a diffrence?Scenario 1: you want to purchase a new vehicle and you have your heart set on a brand-new SUV. you take out a loan to pay for the car, but after six months you begin to fall behind on payments and incur late fees. Does your credit score go up or down? Why does it go up or down? If your score goes down, how can you fix it?
- Required: a to d. Harriet Marcus is concerned about the financing of a home. She saw a small cottage that sells for $55,000. Assuming that she puts 20% down, what will be her monthly payment and the total cost of interest over the cost of the loan for each assumption? e. What is the savings in interest cost between 3.50% and 5%? f. If Harriet uses 30 years instead of 25 for both 5% and 3.50%, what is the difference in interest? Complete this question by entering your answers in the tabs below. Required A to Required E Required F D Harriet Marcus is concerned about the financing of a home. She saw a small cottage that sells for $55,000. Assuming that she puts 20% down, what will be her monthly payment and the total cost of interest over the cost of the loan for each assumption? Note: Do not round intermediate calculations. Round your answers to the nearest cent. Monthly payment Total cost of interest a. 25 Years, 5% b. 25 Years, 4.5% c. 25 Years, 4% d. 25 Years, 3.5%A few years down the road you move out, buying your own home. You decide to take another look at your finances. Your outstanding loan of $250 per month only has 10 payments left on it (out of the original 60) with an interest rate of 12.75%. a. What is the finance charge “f”? b. What is the unearned interest “u”? c. How much would it cost to pay it off on payment #51?Assume you are preparing to move into a new neighborhood. You are considering renting or buying. Divide your team into two groups. Requirements Group 1 will analyze the renting option. A suitable rental is available for $500 per month, and you expect rent to increase by $50 per month per year. Prepare a schedule showing rent payments for the next 15 years. To simplify the problem, assume rent is paid annually. Using 5% as the discount rate, determine the present value of the rent payments. Round present value amounts to the nearest dollar. Group 2 will analyze the buying option. A suitable purchase will require financing $105,876 at 5%. Annual payments for 15 years will be $10,200 (annual payments assumed to simplify the problem). Calculate the present value of the payments. Additionally, using Excel with appropriate formulas, prepare a payment schedule with the following columns (year 1 is completed as an example): After each group has prepared its schedule, meet as a full team to…
- 1. You bought a new car for $42000. Assume the value of the car depreciates by 17% each year. complete the table Age of the Car in years Calculation Value 0 N/A 42000 1 42000*0.83 2 3 4 ... N/A N/A 10 b. Use the table to find a pattern and develop a formula to model the V= value of the car, after n years. c. linear or not linear?1.a. A renter would like to save $25,000 for a down payment for a house. She currently has saved $18,000. At what interest rate, compounded monthly, would she need to invest $18,000 in order to have $25,000 in 5 years? (Round the percent to two decimal places) b. A car with an initial value of $45,000 depreciates (loses value) exponentially. The value of the car after 2 years is estimated to be $36,225. Write an exponential function in the form y=C(b^t) to model the value of the car after tt years. What does your model predict the value of the car to be after 10 years? I think the answer is approximately $8,200 if the normal depreciation rate is 15.60%. Is that correct.A few years down the road you have moved out, buying your own home. You decide to take another look at your finances. Your outstanding loan of $275 per month only has 8 payments left on it (out of the original 60) with an interest rate of 11.75%. a. What is the finance charge “f”? b. What is the unearned interest “u”? c. How much would it cost to pay it off on payment #53?
- A few years down the road you move out, buying your own home. You decide to take another look at your finances. Your outstanding loan of $250 per month only has 10 payments left on it (out of the original 60) with an interest rate of 12.75%. What is the finance charge “f” what is the unearned intrest how much would it cost to pay it off on payment 51b) Homeshare rents out various newly built properties to low-income families. It hasrecently rented a flat to a client for £9,000 per year.A discount rate of 4% is used by Homeshare. Calculate the present value of thisrental income assuming it is expected to continue in perpetuity and there will be:i) No growth in annual rental income ii) 1.5% growth in rental incomeBuying your own home is often mentioned as "the best investment you can make." In 1964, the average home sale price was $19,600. By 2009, the average home sale price had risen to $272,900. What was the average annual rate of change in the price of houses over this 45 year time period? 10.52% per year 12.16% per year 6.03% per year 3.74% per year F