![Shamiyah732](/avatars/1600.jpg)
Shamiyah732
28.02.2020 •
Business
A home comparable to yours in your neighborhood sold last week for $75,000. Your home has a $60,000 assumable 8% mortgage (compounded annually) with 30 years remaining. An assumable mortgage is one that the new buyer can assume on the old terms, continuing to make payments at the original interest rate. The house that recently sold did not have an assumable mortgage; that is, the buyers had to finance the house at the current market rate of interest, which is 7.5%. What selling price should you place on your home? Explain using capital budgeting calculations.
Solved
Show answers
More tips
- S Science and Technology The Metric System in Our Daily Life: Understanding Its Importance...
- H Health and Medicine Angina: Causes, Symptoms, and Treatment...
- C Computers and Internet How to Learn to Type Fast?...
- F Food and Cooking Delight for Gourmets: How to Prepare Liver Pate...
- S Style and Beauty How to braid friendship bracelets?...
- H Health and Medicine Mercury Thermometer Danger: What to do when a thermometer breaks?...
- F Food and Cooking Which Calamari Salad is the Most Delicious?...
- S Society and Politics 10 Tips for Boosting Your Self-Esteem...
- F Food and Cooking The Most Delicious and Simple Fish in Batter Recipe...
- H Health and Medicine What is Autism? Understanding the Basics of This Neurodevelopmental Disorder...
Answers on questions: Business
- B Business the government wants real gdp per capita to double in 14 years. if population is expected to grow by 1% per year then real gdp must grow by ___ per year....
- M Mathematics 10 less than five of a certain number is fourteen more than 7 times of that number. what is the number?...
- S Spanish In spanish mochila is it masculine or feminine...
- M Mathematics First two lessons : £12.75 each lesson all other lessons : £20.00 each lesson leah has some lessons with stan s driving school. the total cost of lessons is £305.50. work out...
- M Mathematics how to solve for 6 square root of 5...
- P Physics What is one major difference between how matter moves through an ecosystem and how energy moves through an ecosystem?...
- C Chemistry Naco3 + 2hcl = 2nacl + h2o + co2. determine the number of moles of hcl that are needed to produce 4.8 moles of co2?...
- H History Young people can get involved in politics by: a.attending town hall meetings b.staying informed by reading the newspapers c.volunteer in political clubs d.all of the above e.none...
- S Social Studies In which of these areas would you be most likely to find the highest concentration of people who follow hinduism?...
- M Mathematics What is the answer to this problem and how do you solve it -6=b/18...
Ответ:
The selling price should be $66K.
Explanation:
Capital Budgeting defines the future value as present value times the interest rate over the years FV=(1+i)^n, the following table shows both future values for Neighbor’s house and mine to calculate the differences.
Future value (FV) = Present value (PV) + (1 + Interest rate)n, where n is raised to the power of the number of years.
FV = PV +p (1+r) -30
PV = 60000
= $60000 (1+0.075) - 30
= $60000 (0.11422)
= $6859.26 + $60000
= $66853.26 .
Given this estimate, my selling price will now be $66K, making a profit of $5K, this way the future seller can either choose to buy my home or any other in the neighborhood since the future value will be the same even though the interest rate is 0.5% higher.
Ответ:
OCHMRSRGMcjh,vu,yehrckh.gfgmcfhmdtykrgj,b