ASSIGNMENT QUESTIONS

$1.$ Discuss the ra$$onale and significance of the $$me value of money.

$2.$ Using the $$me value of money framework, determine the equated monthly instalments $($PMT$)$ in the case

that Jain opts to buy the apartment.

$3.$ Using the $$me value of money framework, determine the total monthly payments for the proposed

alterna$$ve to buy $($taking into account opportunity costs and taxes$).$

$4.$ Using the $$me value of money framework, determine the total monthly payments for the proposed

alterna$$ve to rent.

$5.$ Determine the future capital gain$/$loss incurred a$$er modelling the selling price of the apartment, using

a conserva$$ve $7$ per cent annual apprecia$$on in housing prices. Determine the present value of such capital

gain$/$loss a$$er taking into account the $$me value of money.

$6.$ Based on your analysis, as Jain, would you decide to buy or to rent