Willing to pay today instead of making payments

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Reference no: EM131830467

1. A married couple will buy a beach house once their savings equal $1,943,500.00. They have $903,000.00 at the moment and will invest the money in an account that earns 10.00% per year. How many years before they purchase the beach house?

2. A young graduate has been offered a time-share on a condo in Steamboat Springs, Colorado. To be a part owner, the graduate must pay $1,596.00 at the end of each year for the next 19.00 years. If the graduate’s discount rate is 7.00%, what is the cost of this opportunity in today’s dollars? In other words, what is the most the graduate should be willing to pay today instead of making payments?

Reference no: EM131830467

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