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Consider an income property that is under evaluation for purchase with a $ 4 6 8 , 3 1 7 loan, 5 . 1 %

Consider an income property that is under evaluation for purchase with a $468,317 loan, 5.1% interest rate, compounded annually, amortized over 21 years. The NOI at the end of year 1 is $56,690, year 2 is $48,304, and year 3 is 51,792. At the end of year 3, the property is estimated to sell for $556,914. Discount the equity cash flows over the 3-year holding period at 10.0 percent. Using the principles of mortgage equity capitalization, what is the estimated total property value with a holding period of 3 years?
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