CAIIB RETAIL

Suppose that during the rent of a property the owner earns the income of 60000 on a quarterly basis.
Set the value of this liability at the current moment;
in other words, determine the price of this property, if it was sold at the present moment at the interest rate:
1) of 8% converted on a quarterly basis?
2) of 8% converted on an annual basis?
We have that
1) R = 60000;
i = 0.02;
A = 6000 0 / 0.02
= 3000000:
Thus, the market value of this property is 3000000.
2) In the case we have a complex annuity,
thus: R = 60000, i = 0.08, c = 0.25 Then
p = 1.08^0.25 - 1 = 0.0194265
A = 60000/0.0194265 = 308855 7
In this case the value of this property is 3088557.