Spring 2008 REAE 3325 M W F 8:00 AM to 8:50 AM
Review Materials for RE Fundamentals
Chapter Notes, Video Clips, Presentation Aids and Study Materials
TVM Completion List (updated 4/29/08))
Office Hours for TVM Finance Tutorial Help - Spring 2008
The TVM tutor this semester is Mr. Yong Ho Seo, (817) 272-5843, room 635
Business Building. The tutoring hours are as follows:
Monday
9:00 to 12:00 PM
Wednesday 5:00 to 8:00 PM
Thursday 1:00
to 4:00 PM
Friday
10:00 to 11:00 AM
If you cannot find the TVM tutor during these listed hours, stop by the
Department Office (room 434) or call (817) 272-3705.
Weekly Assignment (You may certainly work ahead, but at a minimum, you should keep up with these weekly assignments.)
Week 1 (January 14, 2008):
* Record the four exam dates in your calendar (also include
the TVM deadline date). See me this week if you have any conflicts.
* Down load, print-out, and read syllabus carefully (see below).
* Purchase textbook, TVM tutorial, and financial calculator (you
need to learn how to use your own financial calculator).
*Read chapters 1 and 13 and view video clips for these chapters
(as always do end of chapter problems).
*Start the TVM tutorial!
Week 2 (January 21, 2008):
*Record the four exam dates in your calendar (also include the TVM deadline
date). See me this week if you have any conflicts.
*Read chapter 14 and view video clip (as always do end of the chapter problems).
*Double check and make sure that you have recorded the four exam dates and TVM
deadline in your calendar.
*Continue with TVM tutorial or turn in a Prior Completion form to Dr. Hansz or
the Department (room 434).
*Practice with your calculator (the time value of money menu).
-Make sure you you know how to set your calculator's "payments per year"
function.
-Know how to switch back and forth between "Begin Mode" and "End Mode."
Week 3 (January 28, 2008): TVM Boot Camp
*Record the four exam dates with the exam location (room 241 Business Building)
in your calendar.
*Turn in TVM prior completion form or complete the TVM Turorial.
*Read "Review Materials for Real Estate" pdf packet and try problem sets 1,
2, and 3. This is found near the Ch 14 materials.
*View the Video/Audio Clips for "Review Materials for Real Estate" and check
answers to problem sets 1, 2, and 3.
*Read chapter 15.
Week 4 (February 4, 2008): Exam 1 Week
*Read Chapter 15. Make sure you understand mortgage payments, mortgage
balances, and loan amortization.
*Make sure you have the exam 1 date (see below), time, and location (Room
241 Business Building) in your schedule.
*The exam will cover chapters 1, 13, 14, and 15. Also, this exam will have
emphasis on TVM.
*Please bring your UTA photo ID, a Scan-tran answer sheet (as specified in the
syllabus), pencils, and your calculator (see additional exam instructions
below).
Week 5 (February 11, 2008):
*Read Chapters 2 and 3 (lots of material in these chapters), view video/audio
clips, do practice problems etc. (the usual routine for each chapter).
*Review Exam 1. Click on this link to download a WMV file.
Exam 1 review file
*Individual exam scores (plus any applicable bonus points) will be posted on
WebCT.
*Please note that as of Sunday, scores have not been posted to WebCT.
There is a technical issue with uploading our class roster into WebCT and the
HelpDesk is looking into this.
*Please note that I will not have office hours Wednesday of this week. I
have off-campus meetings from 9 AM to 7 PM.
ATTENTION!: If you go to WebCT (www.uta.edu/webct) and log-in with
your UTA user name and ID, you should find our class and your Exam 1 score (as a
%) posted. Include in your score is any bonus for early TVM completion. If you
haven't already, please review the Exam 1 audio/video clip (above). The
class median was a 75%.
(If you are interested in the reason for the delay, here it is...Our 2008 class
roster was loaded into REAE 3325 for Spring of 2007.)
TVM Bonus: 14 students received the full 5-point bonus for early TVM submission. Seven students turned in the TVM tutorial before the exam, but the TVM grader found a significant problem(s) with the submitted answers. Sanjukta has e-mailed (to your UTA e-mail accounts) these students (Amy, Christiana, Lori, Shannon, Alan, Ashley, and Linda) for follow-up (please check your e-mail and if you did not receive an e-mail, contact Sanjukta for instructions).
Week 6 (February 18, 2008):
*Read Chapter 3 view video/audio
clips, do practice problems etc. (the usual routine for each chapter).
*Make sure you have the Exam 2 date on your calendar (first week in March).
Week 7 (February 25, 2008):
*Read Chapter 4, 5, 6 view video/audio
clips, do practice problems etc. (the usual routine for each chapter).
*Exam 2 coming soon. Make sure the date on your calendar (first week in March).
Week 8 (March 3, 2008):
*Read Chapter 7 view video/audio
clips, do practice problems etc. (the usual routine for each chapter).
*Review for EXAM 2.
*Exam 2 on Friday, March 7th at 8 AM SHARP Room 241. Exam 2 will cover
chapters 2, 3, 4, 5, 6, and 7. Please bring your photo ID,
pencils, calculator, and Scan-tron answer sheet (exam will be 50 or fewer
multiple-choice style questions).
Week 9 (March 10, 2008):
*Review Exam 2. Click on this link to download a WMV file.
Exam 2 Review Clip
*Read Chapters
8 and 9 view video/audio
clips, do practice problems etc. (the usual routine for each chapter).
*This week is Business Week and we will have speakers all week!
Week 10 (March 17, 2008) SPRING BREAK:
*Read Chapter 10 view video/audio
clips, do practice problems etc. (the usual routine for each chapter).
Week 11 (March 17, 2008):
*Read Chapter 11 view video/audio
clips, do practice problems etc. (the usual routine for each chapter).
*No class on Monday, March 31st. (Please view video clips on Property
Insurance (Chapter 19) and Property Management (Chapter 12).
You are responsible for this material but I will not be covering these topic
formally in class (We will have guest speakers for these topics.))
Week 12 (March 31, 2008):
*No class on Monday, March 31st. (Please view video clips on Property
Insurance (Chapter 19) and Property Management (Chapter 12).
You are responsible for this material but I will not be covering these topic
formally in class (We will have guest speakers for these topics.)
*Chapter 11 (continued, this is a big chapter) view video/audio
clips, do practice problems etc. (the usual routine for each chapter).
Week 13 (April 7, 2008):
*Chapter 11 (continued, this is a big chapter) view
video/audio clips, do practice problems etc. (the usual routine for each
chapter).
*REMINDER: Third exam is Friday, April 18th. TVM final deadline is the
following Friday.
Week 14 (April 14, 2008):
*Chapter 17
and 18 view
video/audio clips, do practice problems etc. (the usual routine for each
chapter).
*EXAM 3 is Friday, April 18th. Exam 3 will cover chapters 8, 9, 10,
11, 12, 17, 18, and 19.
Please bring your PHOTO ID, pencils, calculator,
and Scan-tron answer sheet. (TVM final deadline is the
following Friday.)
Week 15 (April 21, 2008):
*Read Chapter 16 (the final is comprehensive but I will give extra emphasis to
Ch. 16), view video/audio
clips, do practice problems etc. (the usual routine for each chapter).
*Review Investment Problem clips. This is an optional bonus problem that
will be part of the final exam. Will explain more in class.
*Review Exam 3. Click on this link to download a WMV file.
Exam 3 review file
*Individual exam scores will be posted on WebCT.
*TVM tutorial deadline is Friday, April 25th.
Week 16 (April 28, 2008) Last week of class:
*Continue with Chapter 16 (the final is comprehensive but I will give extra emphasis to
Ch. 16) and read Chapter 20, view video/audio
clips, do practice problems etc. (the usual routine for each chapter).
*FINAL EXAM is schedule for Friday, May 9th at 8:00 AM room 241. Please
bring your photo ID, pencils, Scan-tron form, and calculator. The final is
cumulative but emphasis will be placed on Chapter 16.
Downloads:
Investment Problem Spreadsheet
Announcements:
Relevant Articles:
Arlington Star Telegram (AST):
AST 11/17/02 Making homes affordable is partnership leader's goal (.pdf)
AST 11/2/2002 Residents Say Plan Inadequate (.pdf)
AST 10/30/2002 Survey Ranks Dallas as 5th Cheapest Meeting Site (.pdf)
AST 10/27/2002 O.K. Carter on Sprawl (.pdf)
AST 10/18/2002 Area Ranks 10th in Urban Sprawl (.pdf)
AST 10/2002 Plan Would Require Land or Cash for Parks (.pdf)
AST 9/2002 Bombs not lowering homes' appraisals (.pdf)
AST 9/2002 Home Additions: Mortgage Rates may be low, but... (.pdf)
AST 9/2002 Debt of Gratitude (.pdf)
Dallas Morning News (DMN):
DMN 1/2002 Designation of new historic district gets criticism (.pdf)
Forbes (FBS):
FBS 11/22/02 Five Signs Your Home is Overpriced (.pdf)
FBS 11/15/2002 Profits Behind Bars (.pdf)
FBS 10/25/2002 Real Estate Tax Break--Or Bite? 1030 exchanges (.pdf)
FBS 10/2002 Billionaires Bet On Buildings (.pdf)
FBS 9/2002 The Profit--And Paid--Of Being a Landlord (.pdf)
New York Times (NYT):
NYT 12/1/02 Recession Strikes Texas, but Not in Oil-Bust Way
NYT 11/4/2002 Earning More, but Struggling to Own a Home (.pdf)
Shorthorn (SH):
SH 11/20/2002 Apartment owner says no to offer (.pdf)
SH 11/8/2002 Campus Condemnation (.pdf)
Relevant Links:
Anyone interested in receiving weekly e-mail updates on the Texas real estate market? To subscribe go to http://recenter.tamu.edu
Home-Buyers Guide: (http://recenter.tamu.edu/pdf/1044.pdf)
Homeowner’s Guide: (http://recenter.tamu.edu/pdf/1415.pdf)
Landlords and Tenants Guide: (http://recenter.tamu.edu/pdf/866.pdf)
Texas Real Estate Sales and Broker Information: http://www.trec.state.tx.us/
General Quiz Instructions:
Please answer the following questions by selecting the best answer on your Scan-tron answer sheet. Be very careful of erasure marks. Your mark on the Scan-tron answer sheet is your final answer. I suggest circling all answers in your test booklet and filling in the answer sheet at the end. For the True/False questions, ‘A’ equals ‘True’ and ‘B’ equals ‘False.’ Please note:
Time Value of Money Formulas:
Future value of a lump sum: FV = PV(1+i)n
Present Value of a Lump Sum: PV = FV [1/(1+i)n ]
Present Value of an Annuity: PVA = A[(1-(1/(1+i)n ))/ i]
Future Value of an Annuity: FVA = A[((1+i)n -1))/ i]
Sinking Funds: SFP = FVA [ i / ((1+i)n -1))]
Mortgage Payments: PMT = PVA [ i / ((1 - (1/(1+i)n )))]
Answers to Class Problems:
TVM Problem Set 1:
1. $24,464,43
2. $25,093.31
3. $1,738.91
4. $4,755.19
5. $675,764.89
6. $14,381.74
TVM Review: Problem set 2 Answers:
1)
10% compounded semi-annually (1.05^2 = 1.1025; 1.0238^4 = 1.0984)
2)
19,236.15
3)
98,111.31
4)
5,575.46
5)
22,601.66
6)
15.94%
7)
6,357.56
TVM Review: Problem set 3 Answers:
1)
ANN: 15 – 25,288.30 25-20,519.45 MO: 15-2,067.95 30-1614.72
2)
14,043.41
3)
Yes, NPV = 10,850.30
4)
13.22%
5)
PMT = 103,873.36
a.
Balance end of year 5 equals 961,283.21
b.
Balance end of year 15 equals 801,472.49
6)
PV = 854,972.16
7)
79,612.63 + 220,436.31 = 300,048.94
8)
PMT = 638.58 (724.26 – 638.58 = 85.68)
9)
IRR = 16.2%; NPV = 1,306.20
10)
68,640.81
Problem Set 4:
1) a) 19,876.60 b)
1,903,479.15
2)
48,076.30 + 159,263.83 = 207,340.13
3) Investment 1 IRR = 9.57%
Investment 2 IRR = 10.18% or 9.94% assuming annual compounding
4)
N=60, I = 12%, Pmt = 657.56, FV= 88,000 then 657.56 (pmt) + 120.00
(taxes, insurance, maintenance) = $777.56 rent
5)
$1,365.86
6)
8.5%
7)
12.14%
8)
NPV = $209.94 IRR = 12.27%
9)
a) 10.36% b) 4,378.29
10)
163,028.46
11)
1,294.88
12)
137,243.36
Qualifying the Buyer Problem 1:
PI=$614.30 (n=260, i%=.10/12, PV=70,000, FV=0, solve for PMT)
MHE = $614.230+ $84+$21+$24=$743.30
TMD=$743.30+$380+$65=$1,188.30
SMI=$3,200+$240=$3,440
MDR= MHE/SMI = $743.30/$3,440=.2161 --> Make the loan
TDR=TMD/SMI=$1,188.30/$3,440=.3454 ---> Make the loan