8. John is buying a security that will pay $110 each year for the next 10 years. He is thinking about selling the security in 6 years. What price does John think he can sell the security for, if he believes the interest rate will be 9% in 6 years?

9. Peter is considering the purchase of a rental home. He forecasts that he will receive the rent of $20,160 every year. He plans to hold the house forever (leave it to his heir). How much is Peter willing to pay for the rental property if his cost of capital is 7% annually?

11. John, Peter's heir, intends to inherit Peter's rental home in 8 years after the 8 year's rent has been paid to Peter. The rental income is $49,700 each year forever at a 13% discount rate.

What is the expected value of the home in 8 years, when John inherits the home?

$

How much might John be able to sell his claim to the home for today?

$