Question
Suppose that youre founding a student housing company, 343 Rentals, and that the annual income from the new apartment complex youre building is expected to
Suppose that youre founding a student housing company, 343 Rentals, and that the annual income from the new apartment complex youre building is expected to start bringing in $40,000 per year. However, the total building rent is expected to decrease by a uniform amount of $450 each year after the first, for the 25-year expected life of the property. Calculate the equivalent present value of the rental income, assuming a nominal interest rate of 7% per year. Assume that the investment is made at time zero (today) and that the annual income is first received at the end of year one (in other words, ignore that rent is usually paid on a monthly basis). Express your answer in terms of dollars, rounded to the nearest dollar
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