Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A builder is offering $131,554 loans for his properties at 9 percent for 25 years. Monthly payments are based on current market rates of 9.5

image text in transcribedimage text in transcribed

A builder is offering $131,554 loans for his properties at 9 percent for 25 years. Monthly payments are based on current market rates of 9.5 percent and are to be fully amortized over 25 years. The property would normally sell for $140,000 without any special financing. Required: a. At what price should the builder sell the properties to earn, in effect, the market rate of interest on the loan? Assume that the buyer would have the loan for the entire term of 25 years. b. At what price should the builder sell the properties to earn, in effect, the market rate of interest on the loan if the property is resold after 10 years and the loan repaid? Complete this question by entering your answers in the tabs below. Required A Required B At what price should the builder sell the properties to earn, in effect, the market rate of interest on the loan? Assume that the buyer would have the loan for the entire term of 25 years. (Do not round intermediate calculations. Round your final answer to the nearest whole dollar amount.) Sale value Required A Required B Required A Required B At what price should the builder sell the properties to earn, in effect, the market rate of interest on the loan if the property is resold after 10 years and the loan repaid? (Do not round intermediate calculations. Round your final answer to the nearest whole dollar amount.) Sale value

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Critical Handbook Of Money Laundering Policy Analysis And Myths

Authors: Petrus C. Van Duyne, Jackie H. Harvey, Liliya Y. Gelemerova

1st Edition

1137523972, 978-1137523976

More Books

Students also viewed these Finance questions

Question

Describe the 10% asset test for determining reportable segments.

Answered: 1 week ago