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Suppose that an office development project will be financed with $3,000,000 in borrowing before interest carry. The construction will take place over 12 months and
Suppose that an office development project will be financed with $3,000,000 in borrowing before interest carry. The construction will take place over 12 months and the construction loan is expected to be fully repaid at that time. The loan will be drawn in equal amounts over months 1 through 5 . The construction loan interest rate is 12 percent with a 3 percent loan fee. a. What is the amount of construction loan interest carry? b. What is the amount of construction loan repayment? c. How much construction loan fee will be paid? d. What is the construction lender's yield on the loan? Suppose that an office development project will be financed with $3,000,000 in borrowing before interest carry. The construction will take place over 12 months and the construction loan is expected to be fully repaid at that time. The loan will be drawn in equal amounts over months 1 through 5 . The construction loan interest rate is 12 percent with a 3 percent loan fee. a. What is the amount of construction loan interest carry? b. What is the amount of construction loan repayment? c. How much construction loan fee will be paid? d. What is the construction lender's yield on the loan
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