Use the following assumptions to answer the following question:

• Purchase price: $100,000
• Holding period: 5 Years
• First year NOI: $9,000 (remains constant over the entire holding period)
• Loan to Value: 75%
• Interest rate: 7%
• Amortization Period (interest only)
• Payments per year: 1
• EOY five sale price: $100,000 (ignore cost of sale)

What is the yield to the equity based on the above assumptions?

Group of answer choices

7%

9%

15%

20%