Question: You are considering purchasing a flat which can be rented out immediately at $8,000 per year. The duration of each rental contract is ONE year.

You are considering purchasing a flat which can be rented out

You are considering purchasing a flat which can be rented out immediately at $8,000 per year. The duration of each rental contract is ONE year. The rent is expected to be raised by 5% every year. Assuming that you can rent the flat out continuously and the market interest rate is stable at 2%. How much should the price of the flat be

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