11,Real estate values in your area are going up at the rate of 14% each year. Yo

Question

11,Real estate values in your area are going up at the rate of 14% each year. You want to buy an average house. Today the average price of homes is $128,000. Lenders require 20% down payment. You figure you'll be ready to make the down payment in 6 years. How much should it be? 12.You can buy a share of ownership in a partnership right now and you have been assured that you will be able to sell it for $15,000 five years from now. Assuming your money is worth 5%, how much would you be willing to pay for this share? 13.If you deposit $6,000 per year into an account paying 16% interest, how much should you have in that account eight years from now? 14.You are considering the purchase of two different insurance annuities. Annuity A will pay you $10,000 each year for eight years. Annuity B will pay you $8,000 per year for 12 years. Assuming your money is worth 10% and that each costs the same to purchase today, which annuity would you prefer?

Explanation / Answer

11.

value of the average house in 6 years

=PV*(1+g)^t

=128000*(1+14%)^6

=280956.50

down payment amount in 6 years or how much it should be

=280956.50*20%

=56191.30

the above is answer..

we do only one question based on Chegg rule

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