A client of yours wants to purchase a vacation home in


A client of yours wants to purchase a vacation home in Avalon Park, Florida in twenty years time for cash. The house is currently valued at $200,000 and the price is expected to rise on average at 3% per year for the full period. In order to buy that house in 20 years time your client asked you to estimate her monthly payments required so when the time has expired she could buy the house for cash. You have found an annuity investment that could earn her 9% compounded. The value of the house in 20 years would be

a. $212,000

b. $ $361,223

c. $461,223

d. $412,180

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Financial Management: A client of yours wants to purchase a vacation home in
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