You can buy property today for $2.2 million and sell it in 5 years for $3.2 million. (you earn no rental income on the property.) a. if the interest rate is 10%, what is the present value of the sales price?

PV of the sales price  $1,986,948.23

Explanation:

We will calcualte the present value of the sale price using the present value of a lump sum formula:

Maturity3,200,000

time                         5 years

rate         10% = 10/100 = 0.1

PV        $1,986,948.2338  

This indicates the 3,200,000 in five years are equivalent to 1,986,948.23 dollars Thus, this investment is not profitable as the property will be purchased at 2,200,000

month 1 start amount =$3287.90 interest=(3287.90x0.0145/12)3.97 total to pay=$3291.81 paid =$1200 balance =$2,091.87

month 2 starting amount= $2,091.87 interest =$25.28 total to pay =$2117.15 paid =$1200 balance $917.15

month 3 starting amount =$917.15 interest =$11.08 total to pay =$928.23 paid =$928.23 balance =$0 total to pay 1200+1200+928.23 = $3328.23 it will take 3 months to pay a total of $3328.23

answer; dogs;