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:Suppose a property you are seeking to purchase is valued at $200,000. You can take out a loan of 80
percent from the bank, which amortizes in 30 years. The current market interest rate is 7.35 percent.
Suppose you can only afford a monthly payment of USD 900, but the seller is desperate to sell this
property. The seller has already lowered the selling price to USD 180,000. What is the minimum amount
of rebate that the seller should provide to you in order to make you purchase the property?
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