Time Value of Money 1 Objective Use time value of money principles to solve various problems. 2 Due Date This assignment is due in PDF form in the appropriate dropbox at the beginning of class on Tuesday, March 8. 3 Assignment Details 1. Perform the required calculations using time value of money principles and show your work to the extent reasonably possible. For example, when using Excel, use separate cells for inputs instead of embedding all numbers in a formula 2. Solve each of the following problems: 2.1. You are considering purchasing a house that costs $265,000. You must make a down payment of 15% of the value of the house. Four percent of the purchase price less the down payment will be added to the total amount borrowed in order to cover the closing costs. The total loan balance may be borrowed over 30 years at 6% interest. Calculate the monthly payment for the mortgage. 2.2. Create the first three periods of the amortization table for the mortgage in the prior problem. 2.3. You believe that you can pay $300 per month in addition to the payment calculated in problem 2.1. No penalty is charged for early payment. How long will it take you to pay off the mortgage under these circumstances? 2.4. You have decided to sell the house at the end of 10.5 years (126 payments). Using the information from problems 2.1 and 2.2, how much do you still owe on the mortgage when you sell the home? 2.5. A company invests $5 million dollars to purchase and update the landscaping a piece of real estate. As the trees and shrubs mature, the building site is expected to increase in value due to the more attractive nature of the landscaping and the panoramic views of a nearby city. The site is expected to sell for $14 million dollars eight years from now. What is the company's expected nominal annual rate of return on this real estate investment