1. In Part 1 What is the Ending Balance (Outstanding Loan Balance) in Year 2?

2. In your Cash Flows From Operations what is your PGI in year 1?

Your company is considering making an investment in an apartment building. You will finance the purchase with a mortgage loan of 80% LTV. The term of the loan is 25 years with an interest rate of 5.50% (fully amortizing with monthly compounding and payments). You will pay off the mortgage balance when you sell the property. The building has 60 two-bedroom apartments and 30 three-bedroom apartments. You assume that the monthly rent for two- bedroom units is $2,000 and the rent for three-bedroom apartments is $2,500. The building has 100 parking spaces. The charge for each parking space is $100 per month. Additional assumptions about this investment are as follows Annual inflation of rents and parking charge Vacancy and collection loss as % of PGI Parking vacancy allowance Purchase price Assessed valuc Land value as % of the total value Annual growth of assessed value for years 2 through 5 Property tax mill rate Other operating expenses of EGI) Planned holding period Terminal cap rate (applied to 5th year's NOI) Selling cost as a % of gross sales price # of years for calculating depreciation Capital gain tax rate Depreciation recapture tax rate Income tax rate After tax required rate of return 3.0% 5.0% 6.0% $15,000,000 S14,500,000 20% 3.0% 30 3090 4 years 8.000 3.0% 27.5 15% 2590 30% 10% Fill in the proforma and use the regular mortgage described above and in Part 1. Part 1 Fill in the chart below. Assume that you decide to take out the mortgage with the terms outlined above. What are each year's beginning balance, annual debt service (total debt payment), annual interest payment, and ending balance during the holding period? Year Beginning Balance Annual Debt Service Interest Expense Annual Amortization (Prin Ending Balance Part 2 Fill in the chart below assuming you take out an interest onlyloan with a 80% LTV requirement and 5.50% rate (monthly compounding) for 4 years. Note: with interest only loans, the annual debt service consists of only interest, no principal. Year Beginning Balance Annual Debt Service Interest Ex Annual Amortization (Principal) Ending Balance