There Are Two Offers on a Property Listed at $185,000

question 31

Short Answer

There are two offers on a property listed at $185,000. Mr. Smith is offering $183,000 cash. Ms. Jones's offer consists of $100,000 cash and a mortgage back to the vendor for $90,000 at a rate of 7.5% compounded semi-annually and payments of $700 per month for a three-year term. If current three-year rates are 9.5% compounded semi-annually, what is the equivalent cash value of Ms. Jones's offer?

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Definitions:

Medulla

Part of the brainstem that controls vital bodily functions such as heartbeat and breathing.

Cerebellum

The part of the brain at the back of the skull in vertebrates, which coordinates and regulates muscular activity.

Sympathetic Nervous System

Part of the autonomic nervous system that prepares the body for quick response to stress or danger, often referred to as the "fight or flight" response.

Pupil Dilation

The enlargement of the pupil, the black center of the eye, in response to various factors such as low light, arousal, or certain drugs, to allow more light to enter the eye.