REAL 43902-001 Real Estate Capital Markets and Securitization
Homework Assignment #1 (100 points total)
Due: Tuesday, September 8, 2026
Brueggeman, Fisher, & Yates Chapter 3, Problems: 1 (10 points), 2* (10 points), 6 (10 points), 11
(10 points), 13 (10 points).
* (5 points) Building on your answer to question 2, what continuously compounded rate is just as
good (as the rate for the investment you chose)?
Additional:
1. (5 points) When you graduate, you want to buy a new pickup truck costing $70,000. You
have $12,500 saved and need to finance the remaining balance at 4.9% for 72 months.
How much are your monthly payments?
2. (10 points) Suppose that your answer to the previous question is $250/month too much for
your budget. How much do you have to get the car salesman to drop his price (or
alternatively how much extra do you have to put down) to meet your budget requirement?
3. (10 points) Assume that you are 22 now and will retire at age 67 (45 years) and retirement
savings earn 8% compounded monthly. When you retire, what will be the balance in your
retirement account if you deposit $300/month and your employer matches your
contribution dollar-for-dollar after the first five years?
4. (10 points) Assume you reach your retirement savings goal from above and your savings
earn 3% annual rate of return compounded quarterly. You figure you can live comfortably
on $15,000 per month drawn quarterly with the first withdrawal one quarter after your
retirement). How old will you be when your money runs out and you had better die (so as
not to be a financial drag on the living)?
5. (10 points) How does your answer to 4 above change if you have plans to bequeath $1M to
an heir?