Questions -
1) Rose invests $20,000 in a real estate deals and earns $400/month for the first year. What is her return on investment?
2) If you double your investment in a year, what is your ROI?
3) Dave wants to take a year off work and has determined to accumulate enough savings to be able to withdraw $1500/month during that year. He has 4 years to accomplish this goal and can earn 4 ¾% interest on his savings. How much does he need to deposit each month to achieve this goal?
4) What would your car payment be if you financed a car for $18,450 over 3 years at an interest rate of 5%? How would that payment change if you financed it over 5 years at a rate of 4%? Which is the better deal? Defend your answer.
5) MarV, Inc. is considering adding a new wing to their Assisted Living Facility. One option is to borrow the money on a 15-year mortgage at 7.5% APR. The total cost of the expansion is expected to be $3.3 million. What would their monthly payment on this mortgage be? What if they made annual payments instead, but had to pay 8.25%? Show the difference in payments and the difference in total costs. Suggest reasons for and against each alternative.