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A prospective real-estate buyer wants to purchase a beach house when they retire. The buyer is aiming to have $1,500,000 to be available 8 years
A prospective real-estate buyer wants to purchase a beach house when they retire. The buyer is aiming to have $1,500,000 to be available 8 years from today. The buyer assumes they can earn 6% interest annually. 1. What is n? [Select] 2. What is i? [Select] 3. Which present value table should you be using? [Select] 2. Given the assumptions, what single sum amount must they deposit today in order to achieve their goal of $1,500,000? Round to the nearest thousands. [Select] 4. If the buyer thinks they can earn 6% interest annually in the first four years but then thinks they will earn more than 6% interest annually in the last four years, would they need to deposit MORE or LESS money today (relative to your answer in #2 above) in order to achieve their goal? [Select]
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