Reference no: EM131360881
Future value. A speculator has purchased land along the southern Oregon coast. He has taken a loan with the end-of-year payments of $7,000 for 8 years. The loan rate is 8 %. At the end of 8 years, he believes that he can sell the land for $60,000. If he is correct on the future price, did he make a wise investment?
What is the future value of the loan 8 years from now?
If he is right on the future price, did he make a wise investment ?(Select the best response)
A. Yes. He will make a profit because the value of the land is less than the future value of the loan.Yes. He will make a profit because the value of the land is less than the future value of the loan.
B. No. He will encounter a loss because the value of the land is greater than the future value of the loan.No. He will encounter a loss because the value of the land is greater than the future value of the loan.
C. Yes. He will make a profit because the value of the land is greater than the future value of the loan.Yes. He will make a profit because the value of the land is greater than the future value of the loan.
D. No. He will encounter a loss because the value of the land is less than the future value of the loan.No. He will encounter a loss because the value of the land is less than the future value of the loan.
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: Future value. A speculator has purchased land along the southern Oregon coast. He has taken a loan with the end-of-year payments of $7,000 for 8 years. The loan rate is 8 %. What is the future value of the loan 8 years from now? If he is right on the..
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