Question
A group of private investors borrowed $34,963,388million to build 300 new luxury apartments near a large university. The money was borrowed at 5% annual interest,
A group of private investors borrowed $34,963,388million to build 300 new luxury apartments near a large university. The money was borrowed at 5% annual interest, and the loan is to be repaid in equal annual amounts over a 40-year period. Annual operating and maintenance expenses are estimated to be $4,310 per apartment. This expense will be incurred even if an apartment is vacant. The rental fee for each apartment will be $14,506 per year, and the worst case occupancy rate is projected to be 84%. Investigate the sensitivity of annual profit (or loss) to changes in occupancy rate. Express your answer in percent rounded to the nearest hundedths.
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