1. Cindy bought a house and managed to secure a home loan for R790 000 with monthly payments of R9 680.70 at a fixed interest rate of 13.75% per year compounded monthly, over a period of 20 years. If an average yearly inflation rate of 9.2% is expected, then the real cost of the loan is what? Please show calculations.
2. An investment of $83 generates after-tax cash flows of $48.00 in Year 1, $70.00 in Year 2, and $133.00 in Year 3. The required rate of return is 20 percent. The net present value is.