How much will individual be able to put towards his purchase

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Reference no: EM131566167

1. Assume that an individual puts $10,000 into a savings account that pays 3% interest compounded monthly with the intent to withdraw the balance in 5 years to buy a car. If he does not make any further deposits over this period, how much will the individual be able to put towards his purchase?

A. $10,125.63

B. $11,592.74

C. $11,616.17

D. $58,916.03

2. Suppose an investor is interested in purchasing the following income producing property at a current market price of $450,000. The prospective buyer has estimated the expected cash flows over the next four years to be as follows: Year 1 = $40,000, Year 2 = $45,000, Year 3 = $50,000, Year 4 = $55,000. Assuming that the required rate of return is 12% and the estimated proceeds from selling the property at the end of year four is $500,000, what is the NPV of the project?

A. $8,829.96

B. $9,889.56

C. $428,113.65

D. $459,889.56

3. An investor just purchased an office building for $100,000. He knows for certain that he can sell the building for $110,000 in 5 years. Approximately how much does he need to charge in annual rent in order to achieve a 15% annual return on the deal?

A. $2,500

B. $8,000

C. $13,500

D. $20,500

Reference no: EM131566167

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