A business owner wants to purchase an office building of approximately 2,800 square feet for his CPA business. The negotiated sale price is agreed upon at $595,000. The buyer is approved for a loan with a local bank offering the following terms:

Loan Amount maximum of 75% of cost

Fixed Interest Rate of 4.50%

Monthly payments based on a 20 year amortization

Term of the Loan is 5 years (Balloon Note)

What is the beginning loan amount?

a. $535,500 b. $119,000 c. $446,250 d. $476,000

What is the loan payment (rounded to the nearest dollar)?

a. $ 2,480 b. $ 2,823 c. $ 3,414 d. $ 3,011

What is the principal amount that will come due at maturity after 5 years (rounded to the nearest dollar)?

a. $ 309,063 b. $ 406,303 c. $ 440,459 d. $ 369,062