A#\ Mortgage Exercise Worksheet\ CONSTRUCTION INTEREST\ The builder's average loan is

$300,000

.\ The average build time is NINE (9) months.\ The cost of borrowing of

13%

\

$( Avg. Bal. x.)/($)=$ Annual Interest

\

$ Annual Interest /12=($)/(b)ar (xxx) Monthly Interest

\ Construction Time 9 Months

x

$Monthly Interest = Interest Budget\ What is the builder's Construction Interest budget at

13%

interest rates?\

300,000x^()*13=39,000,39,(000)/(12)=3,250 monthy \ 3,250\\\\times 9=$29,250

\ Rates are up

2%

, what is the builder's Interest budget at

15%

interest rates?\ PRICE TO THE CLIENT\ Total Project Costs

=$426,000

\ What Price to the Client at different Gross Profit Margins?\ To Achieve a

15%

Gross Profit Margin, you should charge the client $.\ To Achieve a

17%

Gross Profit Margin you should charge the client

$

.

PRICE TO THE CLIENT Total Project Costs =$426,000 What Price to the Client at different Gross Profit Margins? To Achieve a 15% Gross Profit Margin, you should charge the client \$ To Achieve a 17% Gross Profit Margin, you should charge the client \$