Question
9. Consider the following below market financing problem for two identical homes (assume monthly payments): A B Price $140,000 $120,000 Loan Balance $90,000 (assumable) $90,000
9. Consider the following below market financing problem for two identical homes (assume monthly payments):
| A | B | |
| Price | $140,000 | $120,000 |
| Loan Balance | $90,000 (assumable) | $90,000 (new loan) |
| Down payment | $50,000 | $30,000 |
| I | 7% | 8% |
| Term | 20 Years | 20 Years |
- What is the rate of return on the $20,000 investment in the first alternative?
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Intermediate Accounting
Authors: J. David Spiceland, James Sepe, Mark Nelson, Wayne Thomas
9th Edition
9781259722660
