Cost Estimate ii-Accounting homework paper
Regression and Inflation. The following are values of the consumer price index of Housing for US City average obtained from the U.S. Department of Labor,.
a) A house was bought in November 2004 for $140,000. What should be the price in January
2015 after adjusting for inflation?
b) The owner plans to sell the house in September 2015. Using the data from the last six months (August 2014 – January 2015) create a linear regression model to estimate the price of the house in September 2015.
c) If the owner signed a 30yrs loan for the $140,000 @ 6% APR compounded monthly. How much does she pay per month to the bank?
Linear regression formulas. Value of money in time
YearJanFebMarAprMayJunJulAugSepOctNovDec
2004
186.3187.0187.9188.4188.9190.3190.9191.2191.0191.0190.8190.7
2005191.8192.7194.1194.4194.5195.5196.6196.9197.0198.4198.5198.3
2006200.0200.5201.3201.7202.2203.7204.7205.1205.0204.4204.5204.8
2007206.1207.2208.1208.5208.9210.6211.3211.1210.9210.7210.7210.9
2008212.2213.0214.4214.9215.8217.9219.6219.1218.2217.4216.5216.1
2009216.9217.2217.4217.1217.0218.1218.1217.8217.2216.6215.8215.5
2010215.9215.8216.0215.8216.0216.8217.1217.0216.6216.1215.8216.1
2011216.7217.3217.7217.9218.5219.6220.2220.5220.5220.1220.0220.2
2012220.8221.1221.5221.7222.0223.1223.3223.7223.9223.7223.8224.0
2013224.8225.4225.6226.0226.9228.1228.4228.6228.8228.4228.4228.9
2014230.3234.9239.6244.3249.2254.2259.3264.5269.8275.2280.7286.3
2015294.9
