Answered

IDNLearn.com is designed to help you find reliable answers quickly and easily. Ask any question and receive comprehensive, well-informed responses from our dedicated team of experts.

It is reported that a 99-year license to use a parking spot at 42 Crosby in New York City is priced at $1 million. The licensee will have to cease using the parking spot thereafter. If the interest rate is fixed at 0.5% per month for the next 99 years, what is the fixed monthly payment on an equivalent 99-year mortgage to finance this purchase

Sagot :

Jepessoaidn

Answer:

$13.39

Explanation:

future value of an annuity = monthly payment x FV annuity factor

monthly payment = future value / FV annuity factor

future value = $1,000,000

FV annuity factor = [(1 + 0.5%)¹¹⁸⁸ - 1 ] / 0.5% = 74,670.60843

monthly payment = $1,000,000 / 74,670.60843 = $13.39

Thank you for contributing to our discussion. Don't forget to check back for new answers. Keep asking, answering, and sharing useful information. IDNLearn.com is your source for precise answers. Thank you for visiting, and we look forward to helping you again soon.