Fight Finance

Courses  Tags  Random  All  Recent  Scores

Scores
keithphw$5,541.61
DanielDng$2,340.70
Visitor$830.00
Visitor$610.00
Visitor$240.00
Visitor$223.09
Visitor$210.00
Visitor$170.00
Visitor$130.00
Visitor$120.00
Visitor$120.00
Visitor$110.00
Visitor$90.00
Visitor$80.00
Visitor$66.43
Visitor$63.09
Visitor$60.00
Visitor$52.91
Visitor$50.00
Visitor$50.00
 

Question 362  income and capital returns, DDM, real estate

Three years ago Frederika bought a house for $400,000.

Now it's worth $600,000, based on recent similar sales in the area.

Frederika's residential property has an expected total return of 7% pa.

She rents her house out for $2,500 per month, paid in advance. Every 12 months she plans to increase the rental payments.

The present value of 12 months of rental payments is $29,089.48.

The future value of 12 months of rental payments one year ahead is $31,125.74.

What is the expected annual capital yield of the property?




Copyright © 2014 Keith Woodward