An income property is under evaluation for purchase with a $455,000 loan (FRM with 8% annual rate for 10 years and payments are by year). We plan to hold the property for 3 years and then sell it at the end of year 3. The NOI for year 1 is 72,000 with a growth rate of 2. The end capitalization rate is 12%. We assume after year 3, the NOI still increases at a rate of 2%.

a. With the overall discount rate of 15%, what is the estimated total property value for today?