It is estimated that a timber tract will yield an annual profit of P100,000 for 6 years, at the end of which time the timber will be exhausted. The land itself will then have an anticipated value of P40,000. If a prospective purchaser desires a return of 9% on his investment and can deposit money in sinking fund at 4%, what is the maximum price he should pay for the tract?

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Real Estate

Real estate means ownership of land along with the assets and natural resources that exist on the land. These properties are in real/physical form which is tangible. Real estate simply means land or addition made to land permanently like constructing a residence or different buildings. People invest in real estate to either reside or for wealth creation. Many people investing in real estate further lend the place for occupation or businesses in return for a monthly payment.