Hello! I am working on the following problem and cannot figure out how the principal payments are calculated. The answer has it listed as $216,658 for the first 12 months and then $213,325 for the remainder. How is this calculated?

Hi - This was the only information I was given? I do not have more info on repayment terms, which is why I am confused, but Chegg has it solved?

PROBLEM: Treetop Associated Group (TAG) is seeking financing for acquisition and development of 147 home sites. The land will cost $1.5 million and TAG estimates that direct land development costs at $2.7 million. City federal Bank will make a loan covering 40 percent of the land acquisition cost, 100 percent of direct land development costs and interest carry at assuming 11 percent rate on the entire construction loan with a 3 percent loan origination fee.

TAG has decided to split the development into two parcel types, standard and deluxe, with the standard parcels comprising 87 of the total. Also, TAG thinks that the deluxe sites will be prices at a $2,000 premium over the standard parcel price of $36,000. Total project revenue will be $5,412,000. After making a 60% down payment for the land and incurring closing costs of $50,000, TAG believes that the remaining development costs will be drawn down at $600,000 per month for the first three months and $300,000 per month for the next three months. Parcel sales are expected to begin during the fourth month after closing. TAG estimates that they will sell three standard parcels and four deluxe parcels a month for the remainder of the first year and five standards and two deluxes per month for the second year.

The company and the bank have agreed to a repayment schedule calling for the loan to be repaid at a rate 20 percent faster than the receipt of sales revenues. Other costs to consider include sales expense (paid quarterly at a rate of 5% percent on parcels sold during the quarter), administrative costs of $7,500 per quarter and property taxes of $19,000 at the end of each year.