You are analyzing an income property for which the following is projected:

First year NOI = $100,000

Constant annual increase in NOI = $4,000

Loan to value ratio = .80

Mortgage interest rate = 15%

Mortgage term = 25 years

Holding period = 7 years

Appreciation in value over the holding period = 40%

Equity yield rate = 20%

Investor's marginal tax rate = 22%

Equity dividend rate = 10%

What is the annual mortgage constant (f)?

Question 1 options:

1)

.202119

2)

.110168

3)

.154699

4)

.240360

5)	None of the above

Question 2 (2 points)

Based on the information in the above question (#1), what proportion of the mortgage is paid off during the holding period (Pn)?

Question 2 options:

1)

.052007

2)

.421556

3)

.947993

4)	Can not be determined with the data given

5)	None of the above

Question 3 (2 points)

Again, using the information in question #1,what is the value for the J factor (J*)?

Question 3 options:

1)

.010051

2)

.812880

3)

1.052432

4)

1.091606

5)	None of the above