You are offered an investment that guarantees to pay you back $200 per month for the next 5 years. The annual rate of return for similar investments is 12%. What is the most you should be willing to pay for it today?
Grading criteria: Each problem is worth 10 points.
Below is the rubric I will be using when grading your solutions to each problem:
I expect to see the following:  0 points  1 point  2 points 
Show correct numerical answer  Incorrect  Numerical answer is incorrect because of a typo somewhere in the calculations
OR Numerical answer is correct but only in some intermediate steps 
Correct 
Show correct formulas  Not shown  Shown for some, but not all, steps  Shown for all steps 
Show correct numbers that go into the formulas  Not shown  Shown for some, but not all, steps  Shown for all steps 
Brief verbal explanation: why you’re doing what you’re doing in each step  Not shown  Shown for some, but not all, steps  Shown for all steps 
Appearance  Handwritten  Partially handwritten and partially typed  Typed 
Example:
You are offered an investment that guarantees to pay you back $200 per month for the next 5 years. The annual rate of return for similar investments is 12%. What is the most you should be willing to pay for it today?
Great answer!
(2 + 2 + 2 + 2 + 2 = 10 points) 
Needssomework answer
(1 + 1 + 1 + 0 + 2 = 5 points)




The questions in this homework are based on data that I would like you to get from the following three websites: (1) Simon Property Group (www.simon.com), (2) US Census Bureau (www.census.gov), and (3) Bureau of Labor Statistics (www.bls.gov).
For each question, show in your writeup all numbers you are working with, and explain all relevant calculations. Take a screenshot, etc. of the website from which your data was downloaded, so I can verify your numbers, and include in your uploaded document.
Problem #1 (10 points)
Simon Property Group (www.simon.com) is one of the largest real estate companies in the world which in particular owns hundreds of shopping centers in the US as well as overseas.
 Pick one of their shopping centers in California. On the website find and summarize in your writeup information for:
 Mall type
 GLA
 Main anchors
 Size of, and information on, tradearea resident population
 Size of, and information on, tradearea nonresident population
 Main competitors in the trade area that the website gives
 Using “Reilly’s Law of Retail Gravitation” calculate the breakpoint distance for your shopping center in part (a) relative to the nearest Simon Property Group shopping center. Use GLA sizes for “populations” in the formula. What does the result tell you? Explain.
Problem #2 (10 points)
For Los Angeles metropolitan statistical area calculate the Actual Sales Index for personal care products and services based on the most recent available data. For the data use the US Census’ FactFinder “Advanced Search”, select the right geographies and the right NAICS retail category. In addition, for the same year, for the same geography calculate the Spending Potential Index for personal care products and services. For the data go to the Bureau of Labor Statistics website, in the search line type “Consumer Expenditure Survey” (CEX). On the new page, on the left under “geography” you can then select the right geography.
Do your results suggest “leakage” or “inflow” of consumer spending in Los Angeles MSA? Explain. How can this finding be used in real estate market studies?