Please answer all the questions below, not just one all of them. Kindly show wor
ID: 2780147 • Letter: P
Question
Please answer all the questions below, not just one all of them. Kindly show work, Thank you.
Lucy bought a house that costs $100,000 She financed it with an 80% LTV mortgage. The morgage is a 30 year ruly amortizing FRM with annual compounding and annual payments Lucy's annual cost of ownership net of tax savings is exactly equal to the annual rent she would have paid to live in the same house Lucy will sell the house 30 years after purchase Suppose the house price grows 45annuay (compounded annually buying costs are share of purchase price the house seating costs are 6% of the selling price of the house 2 (a) Whats the sale price of the house in 30 years? QUESTION 29 3 points Save Answe (Continued) 2 (b) Whars Lucy's house sale cash flow(ater expenses)? QUESTION 30 3 points Save Answer (Continued) 2 (O) What Luey initial cash down when she purchased the house negative number QUESTION 31 s points Save Answ (Continued) a (a) owners the NPV for Lucy's buy s lease decision if her annual discount rate 56? QUESTION 32 Spoints Save Answer (Continued) 2 (e) what is Lucys annual IRR from owning net of leasing?Explanation / Answer
P*(1+r)^n : P is house buying cost , r is 4.5 n is 30
=100000 x ( 1 + 4.5)30
= 374531.81
buying cost
100000 of 5%
5000
selling cost (374531.81 + 5000)
379531.1 of 8 %
30362.488
Answer 2 (a)
sales price is $409894.298
Answer 29 2 (B)
$374531.81
Answer 30 2(c)
$95000
answer 31 2 (d)
NPV -$100,000.00
note - image not clear hardly read question no information found reagrding lease. solution provide according information read and visible.