SondraStark_Unit7Assignment_BU250-03

SondraStark_Unit7Assignment_BU250-03 - instead of financed....

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a. I think the buyer should purchase the land now, while the price is still low in that area. b. The most obvious problems with waiting to buy land are there is little to no insight on if the land will appreciate or depricate. If the land appreciates, then by waiting to buy it, you are going to pay a higher sale price, sales tax, etc. c. If the buyer waits to buy the land, they can do more research, see what is going to happen with the housing market and the prices. It also gives the buyer more time to efficetly invest monies so that the land can be paid for,
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Unformatted text preview: instead of financed. d. $15,600/1+.32=15,600/1.32=$11,818.18 needs to be invested. e. 1. $60,000x5%=$3,000 $63,000 available in one year 2. 60,000/1+.05=60,000/1.05=57,142.86 needs to be invested. $2,857.14 left for car 1 FV=2000(1.06)^35=$15,372.17 2 FV=2000(1.06)^25=$8,583.74 Difference over the ten years is $6,788,43 3 At 10% $1 will double in about 7.5 years. At 12% $1 will double in about 6.5 years. 4 Would be a little higher than 6%, but not quite 8%. So, based on the table, approx 7% in nterest will double your investment in te...
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This document was uploaded on 05/06/2011.

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SondraStark_Unit7Assignment_BU250-03 - instead of financed....

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