You have a Buyer who is willing to purchase the property at the Seller's asking price of $2,150,000 but he only has $500,000 for a down payment. There is a new loan that your buyer will assume with a balance owing of $2,335,000 at 8.50% amortized over 20 years. The buyer insists on a 10% return on his $500,000 of equity. He will require the Seller to carry back a 5-year, interest-only Second Mortgage.

A. What will be the amount of the requested Second Mortgage?

B. What will the interest rate be if the property has a Net Operating Income (NOI) of $340,400?