Property taxes in a particular district are 2% of thepurchase price of a home every year. If you just purchased a $150,000 home, what is the present value ofall the future property tax payments? Assume that thehouse remains worth $150,000 forever, property taxrates never change, and a 4% interest rate is used fordiscounting
Property taxes in a particular district are 2% of thepurchase price of a home every year. If you just purchased a $150,000 home, what is the present value ofall the future property tax payments? Assume that thehouse remains worth $150,000 forever, property taxrates never change, and a 4% interest rate is used fordiscounting
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter19: The Basic Tools Of Finance
Section: Chapter Questions
Problem 1CQQ
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Property taxes in a particular district are 2% of the
purchase price of a home every year. If you just purchased a $150,000 home, what is the present value of
all the future property tax payments? Assume that the
house remains worth $150,000 forever, property tax
rates never change, and a 4% interest rate is used for
discounting
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