# How muc h will ge ra rd ne e d in his re tire me nt a

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Unformatted text preview: re tire me nt a c c ount a t a ge 65 if his fund is e xpe c te d to e a rn a n a nnua l re turn of 9.5%? Yo ur Ans wer Sco re Ex p lanatio n 5 .0 0 Corre c t. You know how to c a lc ula te the PV of a n a nnuity. 644324 995733 660929 1500000 Tota l 5 .0 0 / 5 .0 0 Ques tio n Ex p lanatio n Me c a hnic s of c a lc ula ting the PV of a n a nnuity. The a mount ha s to be a ma ximum of \$1,500,000. Why? Question 5 (10 points) Hue ling owns a re nta l prope rty on Ma in stre e t, but she is c onside ring se lling the prope rty to a nothe r re a l e sta te inve stor. In pre pa ra tion for ne gotia ting a pric e , Hue ling wa nts to know the va lue of the prope rty.The Ne t Ope ra ting Inc ome (NOI) is the c a sh flow from re a l e sta te a nd the Ca p Ra te is the ra te , whe re NOI is re nta l re ve nue le ss a ll e xpe nse s e xc e pt loa n se rvic ing. The prope rty ha s a n NOI of \$12,000 pe r ye a r. The loc a l re a l e sta te ma rke t ha s a c a p ra te of 6%. Wha t is a fa ir pric e for the prope rty a ssum...
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## This test prep was uploaded on 04/06/2014 for the course FINANCE 101 taught by Professor Deck during the Spring '12 term at Michigan State University.

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