a a) Explain the time value of money concept (3 points) b) What is an annuity? (3 point) c) Suppose you are buying a house that is priced at $480,000. The bank indicates that it is willing to provide a loan based on the following terms: Loan to value of 80%; interest rate of 7%, and a term of 25 years. What will be your monthly principal and interest payment? (4 points) d) What is your equity investment? (2 points) e) Suppose properties in the area are growing at 5% annually. What will be the value of the house in 10 years? (2 points) Suppose you plan to sell the house at the end of ten. What is the outstanding balance of the mortgage in year ten? (2 points) g) Assume there is no broker fees or taxes, how much profit did you make on the sale in year 10? (4 points) h) What is the net present value of the profit? (5 points) i) Are you better or worse off based on the net present value? Why? (5 points)