Tammy Faye requires a 12% before-tax return on her real estate investments. If she invests $78,000 cash to buy a rental townhouse that has $120 per month in taxes, insurance, and maintenance, and if she can sell the property in 5 years for $88,000, how much monthly rent must she charge to reach her target rate of return? Type your numeric answer and submit

Tammy Faye requires a 12% before-tax return on her real estate investments. If she invests $78,000 cash to buy a rental townhouse that has $120 per month in taxes, insurance, and maintenance, and if she can sell the property in 5 years for $88,000, how much monthly rent must she charge to reach her target rate of return? Type your numeric answer and submit

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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Your daughter needs to be able to draw $50,000 a year from her college savings fund (you started from birth) to pay for college expenses to obtain a medical degree (assume she spends 4 years for bachelor, 4 years for med school, then additional 2 years as resident and yearly spending will be consistent from year to year). At start of her college career, she intends to invest her savings in government securities that should return 5.5% a year compuounded continuously. a. Obtain the equation for dP/dt and then find the genearl solution of P(t) with, as yet undetermined, initial value P_0. b. How large must your daughter's initial college savings be so that she can continue drawing her $50,000 income until she becomes a doctor?
Alex wants to provide funding in the event of his death for his daughter Ellie, age 8, to attend four years of college, starting at age 18. The current annual cost of tuition is $20,000. Assume inflation of 6.5% and after-tax earnings of 7%. If Alex wants to have enough life insurance to assure adequate funds for Ellie when she begins college (should he die today), approximately how much insurance should he have for this need alone? (Round your answer to the nearest dollar.) A)$113,764 B)$75,806 C)$75,451 D)$79,441
Ben and Carla Covington plan to buy a condominium. They will obtain a $224,000, 30-year mortgage at 7.0 percent. Their annual property taxes are expected to be $2,000. Property insurance is $520 a year, and the condo association fee is $240 a month. Based on these items, determine the total monthly housing payment for the Covingtons. Use Exhibit 7-7. (Round your intermediate calculations and final answer to 2 decimal places.) Total monthly housing payment
Donna wants to buy a house for $900,000.00. She makes a 15% down payment and borrows the rest by getting a 30-year mortgage. Her monthly mortgage payment is $3,803.75. What is the principal of her mortgage? What is the total she will pay on the loan?
Rhett is about to begin college (4-year) and has received a 10-year $7,500 Federal Direct Unsubsidized Loan with an interest rate of 6.4%. He will be required to begin making payments six months after graduation. If Rhett decides to capitalize the interest (which totals $2,160) from the time he receives the funds until he begins making payments in 4.5 years, how much total interest would he pay on this loan?
Shane was receiving rental payments of $3,000 at the beginning of every month from the tenants of his commercial property. What would be the value of his property in the market if he wants to sell it, assuming a market capitalization rate of 4.50% compounded annually? $0.00 Round to the nearest cent
Anita and Jim are considering a home equity loan to build a nice deck and patio in their back yard. They want to borrow $35,000 and are quoted an APR of 10%. If their marginal tax bracket is 24%, how much money can they save in taxes each year if capitalize on the tax-deductibility of interest paid on the home equity loan?
Ben and Zhang Manchester plan to buy a condominium. They will obtain a $191,000, 25-year mortgage at 4.5 percent. Their annual property taxes are expected to be $2,148. Property insurance is $1,032 a year, and the condo association fee is $250 a month. Based on these items, determine the total monthly housing payment for the Manchesters. (Exhibit 9-9) Note: Round time value factor to 2 decimal places and final answer to the nearest whole number. Total monthly housing payment
Marie wants to provide retirement income for her dependent parents for 35 years should she die. Marie earns $67,500 and feels that her parents could live on 65% of that amount. If the insurance funds could be invested at 5%, how much life insurance does she purchase using the desired income method? Group of answer choices $1,273,499 $1,450,087 $932,743 $877,500
Ethan is creating a college investment fund for his daughter. He will put in $21,000 per year for the next 17 years and expects to earn a 12% annual rate of return. How much money will his daughter have when she starts college? Use Appendix C to calculate the answer. Multiple Choice $1,014, 538 $1,015,551 $1,027,291 $1,026,564
PLEASE ANSWER. I WILL UPVOTE I PROMISE
Tobin is buying a new apartment. He can afford a mortgage payment of $1990 a month, and a down payment of $11000. He obtained a 16-year loan at 6.05% compounded monthly. Use Excel to determine what the most expensive apartment he can buy under these terms. How much will Tobin pay in interest over the 16-year years? Apartment price = $ Interest paid = $

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