1. If a landowner purchased a vacant lot six years ago for $25,000, assuming no income or holding costs during the interim period, what price would the landowner need to receive today to yield a 10% return on the land investment?
2. You have just purchased 100 shares of stock in a REIT. The REIT is expected to pay quarterly dividends of $.60 per share. If you expect the stock will be worth $55 at the end of five years, what is the value of the stock to you today if your required return on an annual basis is 13%?
3. What will be the value of a $90,000 piece of land in 10 years if it is expected to appreciate at a rate of 5% per year?
4. An investor is purchasing a note that will pay him $45,000 at the end of five years. If his required return is 8%, how much should he pay for the note today?
5. You are participating in a company savings plan and will be depositing $150 at the end of each month for the next 20 years. If the plan earns annual interest of 8%, how much money should you expect to be in your account at the end of 20 years?