Question: There are 4 different ways to pay for your property recently purchased. The four options stated below: $ 200,000 p.a. paid every year for 5

There are 4 different ways to pay for your property recently purchased. The four options stated below:

  1. $ 200,000 p.a. paid every year for 5 years. the first payment paid at the end of the first year.
  2. $250,000 p.a. for 6 years. first payment paid at the end of the first year.
  3. $1,000,000 at the end of the 5th year and $1,250,000 at the end of the 10th year.
  4. A $20,000 deposit paid immediately & $100,000 p.a. paid forever from the rental of the property. The first $100,000 is paid at the end of the first year.

If the rate of return is 12 percent per annum, list the 4 options from cheapest to most expensive. Also state the PV of each alternative.

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