2. Calculate the present value to purchase a lot of land if 818,000 is put down and $2,000 is pe of the cash price for the land is 125, 1 to pay cash or finance the purchase? According t Value of an Arsity Table, at 1.5% interest for 5 years, the factor is 17.16664 O 852,337.28 is better to pay $25,000 cash O14.782.64 better to finance the purchase O 827, 545.28 is better to pay $25,000 cash 822,782 6s better to finance the purchase
2. Calculate the present value to purchase a lot of land if 818,000 is put down and $2,000 is pe of the cash price for the land is 125, 1 to pay cash or finance the purchase? According t Value of an Arsity Table, at 1.5% interest for 5 years, the factor is 17.16664 O 852,337.28 is better to pay $25,000 cash O14.782.64 better to finance the purchase O 827, 545.28 is better to pay $25,000 cash 822,782 6s better to finance the purchase
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:2. Calculate the present value to purchase a lot of land if $18,000 is put down and $2,000 is paid per quarter for 3 years. Assume that there is 6% interest that is compounded quarterly
if the cash price for the land is 825, 000, is it better to pay cash or finance the purchase?
According to the Present Value of an Annuity Table, at 1.5% interest for 5 years, the factor is 17.16564
O $52,337,28, it is better to pay $25,000 cash
14.782.64 is better to finance the purchase
$27, 565.28 at is better to pay $25,000 cash
O822,782.64 it is better to finance the purchase
"At (harger Canad
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