An appraiser is looking for comparable sales and finds a property that recently sold for $$204,500.$ She finds that the buyer was able to

assume the seller's fully amortizing mortgage, which had monthly payments based on a $7$ percent interest. The balance of the loan at

the time of sale was $$141,500$ with a remaining term of $15$ years $($monthly payments$).$ The appraiser determines that if a $$141,500$ loan

was obtained on the same property, monthly payments at the market rate for a $15-$year fully amortizing loan would have been $8$

percent with no points.

Required:

a$.$ Assume that the buyer is expected to benefit from the interest savings on the assumable loan for the entire loan term. What is the

cash equivalent value of the property?

b$.$ What is the cash equivalent value of the property if you assumed that the buyer is only expected to benefit from interest savings for

five years because he would probably sell or refinance after five years?

Complete this question by entering your answers in the tabs below.

Assume that the buyer is expected to benefit from the interest savings on the assumable loan for the entire loan term. What

is the cash equivalent value of the property? $($Do not round intermediate calculations. Round your final answer to $2$ decimal

places.$)$

Cash equivalent value