Exercises 1) You are comparing two houses in Astana. You have 2 million KZT for a down payment, and 10 year mortgage rate is 12%. The two houses completely have the similar characteristics. But, due to their location and ages price and annual property taxes are different. Current year's tax of the houses has been paid. House House 2 Price of the house 10000000 12000000 Annual property tax 350000 200000 You expect annual property tax to grow at an annual inflation rate of 10%. In present value terms, which house is cheaper? Why and how much? 2) After your graduation at the age of 21 you are planning to get employed and immediately start your retirement plan with Ular Umit. The pension fund payments will be 2 million KZT per year. According to legislations, the earliest age of retirement is 51. The fund will be investing your payments at an annual rate of 12% per year. However at the age of 41 you would like to make a trip to far Asia as a reward for your many years of working. Currently such a trip costs 2 million KZT, but you expect this cost to increase by 10% every year. After your retirement also you are planning to rewards yourself as a trip to Europe and America. Today such a trip will cost 3 million KZT and you expect this cost to increase by 8% every year. After your retirement how much money will be accumulated in your fund account for your remaining life? 3) As a young entrepreneur, you are trying to assess the value of a small supermarket that is for sale. Last year the supermarket generated a net cash flow of 3 million KZT to its owner. And net cash flow is expected to grow at 7% every year. In case you purchase the business, you will run it for 5 years and then sell it. Sales price of the business after 5 years is estimated to be 30 million KZT. If you require 14% from such an investment, how much will you pay for the supermarket? 4) Aigul Zhumanova is currently 15 years old. After 2 years, she is expected to start university. Her father thinks that he should start accumulating the necessary funds for her study now on. Currently, cost of the university Aigul wants to study is 500 thousand KZT. However, due to inflation, university fees are expected to grow at an annual rate of 9%. Her father has 700 thousand KZT in a savings account that pays 12% per year. How much should he save and deposit every year, so that Aigul will start and finish her university without any financial difficulty