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:
- $ 200,000 p.a. paid every year for 5 years. the first payment paid at the end of the first year.
- $250,000 p.a. for 6 years. first payment paid at the end of the first year.
- $1,000,000 at the end of the 5th year and $1,250,000 at the end of the 10th year.
- 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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