A property is expected to have NOI of $${100}_{,}{000}_{?}$ the first year. The NOI is expected to

increase by $3\%$ per year thereafter. The appraised value of the property is current $$1$ million and

the lender is willing to make a $$900,000$ participation loan with a contract interest rate of $8\%.$

The loan will be amortized with monthly payments over a $20-$year term. In addition to the

regular mortgage payments, the lender will receive $50\%$ of the NOI in excess of $$100,000$ each

year until the loan is repaid. The lender will also receive $50\%$ of any increase in the value of the

property. The loan includes a substantial prepayment penalty for repayment before year $5,$ and

the balance of the loan is due in year $10.$ Assume that the appraiser would estimate the value in

year $10$ by dividing the NOI for year $11$ by a $10\%$ capitalization rate.

Calculate the effect cost to the borrower $($to the lender$)$ of the participation loan assuming the

loan is held for $10$ years $($in decimals, rounded to $3$ digits$).$