terrichichester-BU250-unit7-assignment

# Terrichichester-BU25 - \$28,000 Price of the land now \$32,500 Projected sale price of land in 2 years part A Should the buyer purchase the land now

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part A.  Should the buyer  purchase the land now o \$28,000   Price of the land now \$32,500  Projected sale price of land in 2 years \$30,000  CD worth now 4% interest compounded annually \$2  Years to maturity for CD \$600  Early withdrawl penalty If the buyer cashes in the CD now will he have enough? Yes, even with paying the penalty the N = 2 I =  0.04 \$30,000.00 CD worth now PV =  30,000 enter as negative number 600 penalty \$32,448.00  Value if Cd is left to mature \$29,400.00 cash if CD is cashed in \$29,400.00 \$28,000.00 \$1,400.00 Cash left from cd after buying land Part b. The two major problems with waiting to buy the land is that the land could no longer be available Part c.  one advantage to waiting the 2 years is that the land could possibaly decreased in value and the Part d.  \$15,600  Lots in a new subdivision How much to invest today to buy in one year at 8% compounded quarterly

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## This note was uploaded on 05/16/2011 for the course BUS 250 taught by Professor Barrie during the Spring '10 term at Kaplan University.

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Terrichichester-BU25 - \$28,000 Price of the land now \$32,500 Projected sale price of land in 2 years part A Should the buyer purchase the land now

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