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if possible show in excel You are considering the purchase of a property today for $400,000. You plan to finance it with an 80 percent
if possible show in excel
You are considering the purchase of a property today for $400,000. You plan to finance it with an 80 percent loan. The appreciation rate on the property value is expected to be 5 percent annually for the next three years a) Approximate the expected annual average rate of appreciation on home equity for the next three years. b) What if you now think that a $400,000 purchase price may be somewhat high and that if you pay this price, the expected appreciation rates in your house price will be as follows: year 1 = 0%, year 2 = 2%, and year 3 = 3%. How will your answer to part (a) change? Expectations: a) Put together a table with the value of the house year by year. The value of the house in each year should be as a formula considering the previous price and the appreciation. b) Compute the equity in the house year by year as a formula. c) Compute the appreciation of the equity year by year as a formula d) Compute the average appreciation rate (simple average) for the equity with the formula or function in Excel. e) Compute the average compounding rate of appreciation (also called geometric average or simple the RATE in time value of money) for the equity with the formula or function in Excel Step by Step Solution
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