Part $1$: Time Value of Money

Solve the following questions using TVM functions in Excel. You will receive no credit if you type in numbers instead of using equations$/$functions$/$references in cells other than inputs.

$1.$ How much would you pay for the right to receive $$15,000$ at the end of $20$ years if you can earn a $9\%$ return on a real estate investment with similar risk?

$2.$ What constant amount invested at the end of each year at a $11\%$ annual interest rate will be worth $$30,000$ at the end of five years?

$3.$ Your father will convey a property to you in $15$ years. If the property is expected to be worth $$600,000$ when you receive it$,$ what is the present value of the property? Your discount rate is $6\%.$

$4.$ What is the NPV of $$500$ received for the next four years and $$2,000$ received at the end of the fifth year if your required return is $8\%?$

$5.$ Assuming no income or holding costs during the period, if you purchased a vacant parcel of land five years ago for $$1,500,000,$ how much would you have to sell it for to yield a $7\%$ annual return on your investment?

$6.$ Calculate the IRR and NPV for the following cash flows. Assume a $10\%$ discount rate.

$7.$ If your tenant pays you rent of $$30,000$ a year for $10$ years at the beginning of each year, what is the present value of the series of payments discounted at $7\%$ annually?

$8.$ You are going to invest $$400,000$ in a real estate investment project that generates the following cash flows. Year $1$ Cash flow: $$150,000,$ Year $2$ Cash flow: $$150,000,$ Year $3$ Cash flow: $$150,000,$ Year $4$ Cash flow: $$150,000,$ Year $5$ Cash flow: $$150,000.$

Assuming a $10\%$ discount rate, what is the NPV of this project? What is the IRR?

$9.$ You own a building that a local business wants to rent for the next $10$ years. The business owner has offered to pay $$50,000$ today or pay $$8,700$ at the end of each of next $10$ years. If your required rate of return is $12\%,$ which payment schedule should you accept?

$10.$ How much would you pay to participate in a real estate project that pays nothing for the next $10$ years and $$3,000$ for the following $10$ years if you can earn $12\%$ return on other investments of similar risk? Assume the annual revenue is generated at the end of the year.

Part $2$: Loan Amortization

Solve the following questions in Excel. Use Excel functions where applicable. You will receive no credit if you type in numbers instead of using equations$/$functions$/$references in cells other than inputs.

You consider purchasing a $$250,000$ home for which you will be making a $20\%$ down payment and obtaining a mortgage to finance the remaining amount. The mortgage is for $30$ years $(360$ months$)$ and has a fixed nominal annual rate of $3\mathrm{.}5$ percent, with monthly payments made at the end of months.

Fill out the blank blue cells in the Mortgage Input and Basic Output sections.

Complete the mortgage amortization schedule.

Insert the graphs for:

Interest & Principal payments

Ending balance $6.$ Calculate the IRR and NPV for the following cash flows. Assume a $\backslash (10\backslash \%\backslash )$ discount rate.