1. What is the actual present value of the lien ($8,000, 30 yrs @ 12% interest – do not calculate
simple interest!)?
2. How much will the conservator have after the sale of the property closes?
To find the present value of a lien with a principal amount of $8,000, a term of 30 years, and an interest rate of 12%, we can use the present value formula.
1. The formula to calculate the present value of the lien is:
Present Value = Principal / (1 + Interest Rate)^(Number of Years)
Substituting the given values, we get:
Present Value = $8,000 / (1 + 0.12)^30
= $8,000 / (1.12)^30
= $8,000 / 20.43417825
≈ $391.66
Therefore, the actual present value of the lien is approximately $391.66.
Now, let's move on to the second question.
To determine how much the conservator will have after the sale of the property closes, we need additional information. Specifically, we need to know the sale price of the property and any additional expenses or fees associated with the sale.