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the annual income from an apartment complex is $20,857. the annual expense is estimated to be $2,034. the apartment complex could be sold for $113,851 at the end of 10 years. if your marr is 10%, how much should you pay for the apartment complex if you were to buy it now?

Respuesta :

If you were to purchase the apartment building right now and your limit was 10%, you would shell out $159,547.

A sum of money's present value is how much it is worth today. For instance, the present value is what $110 is presently worth if you are promised $110 in a year.

The total of taxes and operating expenses for any particular year is referred to as annual expenses.

Present Value = (Income - Expense)(P/A, 10%, 10) + Sale(P/F, 10%, 10)

= (20,857 - 2,034)(P/A, 10%, 10) + (113,851)(P/F, 10%, 10)

= 18823 × (6.1445) + 113,851 × (0.3855)

= 159547.484

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