Calculate the expected value, Financial Econometrics

Assignment Help:

Gabi wishes to purchase an apartment in Berea Johannesburg which is situated in a quiet street. The purchase price, including costs, is R355 000 and she wishes to obtain a 100% mortgage bond at an interest rate of 6%, interest compounded monthly. The term of the loan is 20 years. Property economists have suggested that property values are expected to rise at a rate of 9% per year. Gabi will be able to rent out the apartment after costs at a rate of R2 000  per month. Interest and rent are payable at  the beginning of each month.

Required:

1 Calculate the expected value of the apartment in 20 years' time.

2 What is the mortgage loan repayment at the beginning of each month?

3 What is the net amount Gabi has to pay in each month, if any?


Related Discussions:- Calculate the expected value

Evaluate the feasibility of project, Question 1 : Assuming that you ar...

Question 1 : Assuming that you are appointed as a consultant to assess the Tertiary education sector in Mauritius in order to do a due diligence on the potential f

Differentiate between ordinary shares and preference shares, Differentiate ...

Differentiate between Ordinary shares and Preference shares. Briefly explain three characteristics that any security for a loan should have.

Risk, Hsve s Finsncial Econometrics project that needs to be done. It invol...

Hsve s Finsncial Econometrics project that needs to be done. It involves fitting AR(1)-Garch(1,1) model to two series of log returns and copulas, forecasting and Risk calculation

What is the impact of diversification, What is the relationship between the...

What is the relationship between the arithmetic average and the geometric average return for each stock and the S&P 500? Explain. Compare the standard deviations for each of the

Commercia bank functions, list of those and their functions source of fund ...

list of those and their functions source of fund and how the sources are lend out?

You earn an effective annual return of 6 percent, You decide to max-out you...

You decide to max-out your annual investment into your Individual Retirement Account and invest $6,000 at the end of each year for the next 17 years. At the end of this investment

Quantitative Finance, I need help on few questions related to quantitative ...

I need help on few questions related to quantitative finance. Could you help me out in those.

Intercorporate investments, Intercorporate investments: DI has a 25% ...

Intercorporate investments: DI has a 25% interest in a gold mine in the Yukon. They have held this investment for eighteen months. During this time it has not made any mon

Mauritian financial system, Question 1: (a) Highlight the main theories...

Question 1: (a) Highlight the main theories of the level and term structure of interest rates. (b) To what extent they can be used to explain the level and structure of inte

Investment is expected to return of 5 percent in the future, If an investme...

If an investment is expected to return of 5 percent in the future, a $53,000 investment will grow to how much in 22 years?

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd