The Owner of a Property Listed at $195,000 Is Considering

question 105

Essay

The owner of a property listed at $195,000 is considering two offers. Mr. and Mrs. Sharpe are offering $191,000 cash. The Conlins' "full-price" offer consists of $65,000 cash and a mortgage back to the vendor for $130,000 at a rate of 7.5% compounded semi-annually with payments of $1,000 per month for a five-year term. If current five-year rates are 8.5% compounded semi-annually, what is the equivalent cash value of the Conlins' offer? Which offer should be accepted?

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Definitions:

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West Africa

A region located in the western part of the African continent, consisting of countries along the Atlantic Ocean and Sahara Desert.

Infectious Disease

Diseases caused by pathogens such as bacteria, viruses, fungi, or parasites that can be spread, directly or indirectly, from one person to another.

Statistica Neerlandica

A peer-reviewed scientific journal covering research in the field of statistics and its applications.