The $N\frac{O}{?}$ for a small income property is expected to be $$155,100$ for the first year. Financing will be based on a $1\mathrm{.}2DCR$

applied to the first year NOI, will have a $10$ percent interest rate, and will be amortized over $20$ years with monthly

payments. The $N\frac{O}{?}$ will increase $4$ percent per year after the first year. The investor expects to hold the property for five

years. The resale price is estimated by applying a $9$ percent terminal capitalization rate to the sixth$-$year NOI. Investors

require a $15$ percent rate of return on equity $($equity yield rate$)$ for this type of property.

Required:

a$.$ What is the present value of the equity interest in the property?

b$.$ What is the total present value of the property $($mortgage and equity interests$)?$

c$.$ Based on your answer to part $($b$),$ what is the implied overall capitalization rate?