This is the easiest question because you have to pretty much replicate what we did in the last numerical example in Chapter 10 PowerPoint! This is the most difficult question because all sub-questions are connected: if you make a mistake in the first part, the rest will be incorrect as well. So, be careful! Triple-check your math!

So, here's what I want you to do:

Re-do the problem in Chapter 10 PowerPoint slides 78-85, EXCEPT the NOI for the first year is not $50,000 butfour times larger ($200,000), AND the loan is an interest-only loan.

HINT: Forgot how interest-only loans work?? Check the last slides in Chapter 7!

If you can, do the math in Excel with correct referencing to cells with intermediate results. This will allow you to avoid rounding errors. Otherwise, increase decimal places - the more the better! Say, 6 or even higher.

Your re-calculated answers to Questions 1~7 on the slides:

(Question 1) I don't need your answers for this one. But the answers to this question are used to solve Question 2! (Question 2) Your answer is $ . Don't use the "$" sign, and round to whole dollar & the NEAREST THOUSAND (e.g., if you got 1,234,567 then type 1,235,000). (Question 3) Your answer is $ . Don't use the "$" sign, and round to whole dollar & the NEAREST THOUSAND (e.g., if you got 1,234,567 then type 1,235,000). (Question 4) Your answer is $ . Don't use the "$" sign, and round to whole dollar & the NEAREST THOUSAND (e.g., if you got 1,234,567 then type 1,235,000). (Question 5) Your answer is %. Don't use the "%" sign, and round to 2 decimal places: e.g., type 1.23 if you got "1.23 percent". (Question 6) Your answer is %. Don't use the "%" sign, and round to 2 decimal places: e.g., type 1.23 if you got "1.23 percent". (Question 7) Your answer is %. Don't use the "%" sign, and round to 2 decimal places: e.g., type 1.23 if you got "1.23 percent".

One last question! If the first year's NOI increases further, the investor's first year return (or the equity dividend rate) will ___ and the going-in cap rate will ___ . Your answer to this statement is . (Put a number from the table below that corresponds to your chosen answer. For example, type 1 if your chosen answer is the first row in the table.)

1	increase; increase
2	increase; remain unchanged
3	increase; decrease
4	remain unchanged; increase
5	remain unchanged; remain unchanged
6	remain unchanged; decrease
7	decrease; increase
8	decrease; remain unchanged
9	decrease; decrease