7.4k views
5 votes
A lender is willing to provide a loan equal to 80% of a property worth $360,000. If such a loan carries an interest rate of 7.5% for a term of 20 years, what is the projected before-tax cash flow? The NOI is $40,000 per year. The 7.5% 20-year annual loan payment factor is .09809. Multiply the OLB by this factor to obtain the annual mortgage payment.a. $11,000b. $11,750c. $15,615d. $28,024

1 Answer

1 vote

Answer:

B) $11,750

Step-by-step explanation:

annual mortgage payment = net operating income - (outstanding loan balance x loan payment factor)

outstanding loan balance = property value x loan percentage

annual mortgage payment = $40,000 - [($360,000 x 80%) x 0.09809] = $40,000 - ($288,000 x 0.09809) = $40,000 - $28,250 = $11,750

User Tono Nam
by
7.6k points

No related questions found

Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

9.4m questions

12.2m answers

Categories