Question
a. You borrow $80,000 today. If the interest rate is 4 percent compounded monthly and you make monthly payments of $450 at the beginning of
a. You borrow $80,000 today. If the interest rate is 4 percent compounded monthly and you make monthly payments of $450 at the beginning of each month, how long will it take you to pay off your loan? Do not write any units. Round your answer to the nearest one-hundredth percentage point. For example, write 112.56 for 112.56 months.
b. You purchased a rental property that generates $50,000 during the first year. The property will produce an additional 49 cash flows growing at a rate of 4 percent per year. If the interest rate is 8 percent compounded yearly and rental payments are made at the beginning of each year, what should the value of this property be? Do not write any symbol. Round your answer to the nearest one-hundredth percentage point. For example, write 112.56 for $112.56.
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