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Jason buys a rent house for $60.000 and puts the net rent (Net Operating Income,...

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Jason buys a rent house for $60.000 and puts the net rent (Net Operating Income, NOI) - after taxes, insurance, and repair expenses into Simmons Bank. The net rent is $600/month. The after tax rate of return on the rent payments, deposited in the bank is 3%/year, compounded monthly. Jason plans to sell the house after 15 years and add the sale proceeds to his rent account at the bank to pay for his son's college and have a nest egg started for his retirement. When Jason sells the house, he will have to pay a 20% capital gains tax on the fully depreciated value of the house. The inflation rate is 2.5%/year. The value of the house increases with the inflation rate. Ignore costs associated with the purchase and sale of the house (title insurance, survey, closing fees, realtor commission, depreciation recapture taxes, etc.). What is the expected value of Option A after Jason sells the house and pays his taxes in 15 years? (Show how you calculate the value)

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