How much is the cash value of Mr. Salazar property?

Answer 1

You're basically just taking the values in the problem and plugging them into the Present Value equation.

PV = PMT•(1 - (1 + r)^-n)/r

where

PV = Present Value (what we're looking for)

PMT = reoccurring payment (usually a monthly payment)

r = rate or interest (in this case mortgage interest)

n = number of time periods (if you're dealing with a 20-year mortgage, 20•12 is 240)

From that point, if there's a down payment on the house, add that to the Present Value and that's the cash value of his house.