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

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

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...
View Full Document

Ask a homework question - tutors are online