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You’re considering purchasing a house. You expect that you will own this house for 20 years...

You’re considering purchasing a house. You expect that you will own this house for 20 years and that you’ll have to perform major repairs twice during that time. Explain how the expected timing of these repairs would affect the amount you are willing to pay for the home. Discuss how this relationship depends on whether you have a high discount rate or a low one.

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The expected timing of the repairs would have any effect in the willingness to pay that you can get that, when you consider the interest rate to be constant, late the repair would be, the better for you on the grounds that the present value would decrease and vice versa.

Presently when you believe the repair time frame to be constant, in the event that you have a high discount rate the present worth would be less with the goal that it would be in an ideal situation for you and vice versa. along these lines the discount rate just as the timing of the repair will influence your willingness to pay all in all.

Hope its helps you...please like the answer...

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