Question
In the beginning year 2010, Mr. Andrew planned to buy a house 10 years from then. The average price of the property in a region
In the beginning year 2010, Mr. Andrew planned to buy a house 10 years from then. The average price of the property in a region that he was intending to buy cost N$ 1.5 million. The inflation per year is estimated to be 5.1%, 5.3%, 5.7%, 5%, and 4.5% for the next five years and expected to remain at 4.4% for the following five years. From the year 2016 onwards, the real estate market factors were dropping and hence the prices. The prices were dropping at a rate of 10% per annum. If Andrew started an annuity savings scheme which offered an interest of 6% per annum, then to buy the house at the end of the 10th year, what amount of money that Mr. Andrew should have saved every month in the savings scheme? What is value of the property now in that region with respect to the inflation and the market factors?
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