1. You are in the process of purchasing a commercial property, and have offered the seller a price of $1,200,000. Your bank has offered to provide a 25-year fixed-rate mortgage of $960,000, with a quoted rate of 6.9%.

1. What would the monthly payment be on this loan?

1. 2. Assuming that you make the required payment amount every month for 4 years, what would the outstanding balance at the end of that period?
   3. Assume that you pay $10,000.00 per month for the first 48 months. What would the outstanding balance after that period be in this case?
2. On the real estate purchase outlined in question 1 above, you anticipate collecting monthly rent of $11,000 per month for the next five years. After five years, you anticipate selling the property for $1,500,000. Is this a good deal if you normally require a rate of return of 10%?

You are evaluating the purchase of a small rental property in Philipsburg. You predict that you can collect rent income of $700 per month for the next 10 years. After 10 years, you estimate that you will be able to sell the property for $175,000. You require a return of 9% on your real estate investments. What is the most that you should pay for this property today?