Problem $6-9$

An appraiser is looking for comparable sales and finds a property that recently sold for $$204,500.$ The appraiser 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?

Note: Do not round intermediate calculations. Round your final answer to the nearest whole dollar.