real estate finance

Question 1 (8 marks): Paul, now 65, just retired. He expects to live 15 more years. He is now considering buying a unit of a retirement complex and moves there. The unit is priced at 350,000. If renting, the monthly amount would be 1,500. Assume Paul's saving rate is jl=4%. He has three options to move there. (1) loan stock. He needs to give the developer an upfront interest-free loan of 200,000. (2) shared equity. He is allowed to buy 40% of the unit's value. Assume house price grows 5% a year. (3) life tenancy. He needs to pay a rent lump-sum of 150,000 up front. What is the monthly cost for each option? Ignore the operating costs of the unit