Question

An institutional lender is willing to make a loan for $1 million on an office building at a 10% interest (accrual) rate with payments calculated using an 8% pay rate and a 30-year loan term. (That is, payments are calculated as if the interest were 8% with payments over 30 years.). After the first five years the payments are to be adjusted so that the loan can be amortized over the remaining 25-year term. What is the initial payment

Answer 1

$7337.65.

Step-by-step explanation:

Loan is what someone in need of financial aid for the purpose of investment or other things collect or take money from banks, friends, family or relatives with the intent of returning it back(probably with interest too).

From the question, we are given the following information: the total loan amount on an office building = $1 million = 1,000,000 at a 10% interest (accrual) rate '' with payments calculated using an 8% pay rate and a 30-year loan term".

Hence, if we are to do this on Excel, we will just just use the - PMT of 8% divided by 12 = (0.00666666667) , the number of payment = 360 and the total loan amount which is going the give us the value of $7337.65.