Frank Evans purchased a 250,000 square foot office building in downtown St. Paul, Minnesota, on June 1, 2005. At the time of purchase, the building had a Net Operating Income of $2,500,000. Mr. Evans obtained a loan with a 7.92% loan constant with a 30-year amortization schedule at the closing of the property. The Annual Debt Service (ADS) for this loan is $1,871,100.00. The loan has a maturity date of May 31, 2015. The loan does not contain a prepayment penalty.

Mr. Evans wants to refinance the existing loan at the end of Year 4. He has been approached by the following three banks offering the following terms and conditions:

Bank A: They will refinance the balance of the existing loan at an interest rate of 7.0% interest based on a 25-year amortization schedule.

Bank B: They will finance up to the original loan amount at the time of purchase at an interest rate of 7.25% based on a 25-year amortization schedule.

Bank C: They will finance up to 80% of the original purchase price at 7.50% based on a 30-year amortization schedule.

Answer the following questions based upon the information above. Show all work.

Question1: Assume Mr. Evans wants to refinance his loan at the end of five (5) years and wants to keep his ADS at $1,871,100.00, based on the interest rates and amortization schedules which bank would give him the most money? Which bank would give him the least money?