1. You forecast that a property will have Net Operating Income (NOI) of $800,000 next year, using a capitalization rate of 3.75% what is the propertys estimated value? (See Valuation of Income Properties, Chapter 10 in 16^th edition)
   1. $21.3 million
   2. $8.75 million
   3. $3.0 million
2. You are considering purchasing a small commercial property for $2,000,000. A bank has offered you two different loan options, the first would require a down payment of 30% and would have an interest rate of 4.0%. The second option would require a downpayment of only 20%, but the interest rate would rise to 5.5%. Both loans would have 25 year terms. After determining your monthly payment for each, calculate how much you are effectively paying (solving for RATE) for the additional $200,000 being borrowed under the 20% downpayment option.
   1. 15.17%
   2. 9.92%
   3. 9.75%
   4. 14.18%