Present Value [2937]

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An apartment has net operating income for $500,000 per year.  It is expected to sell at the end of the 10th year for $6,000,000.  Assume a discount rate of 9%.  What is the property worth now?

 

Assume a sale price of $5,000,000 and a 75% loan at 10% for 20 years,  answer the next 5 questions.!

 

Column

Rate

Years

Amount

Factor

Value

4

9.0%

10

$6,000,000

0.422411

$2,534,465

5

9.0%

10

$500,000

6.417658

$3,208,829

 

 

 

 

 

$5,743,294


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