You are offered loans from two competing lenders on the purchase of a $6.5million property for a 5-year term (25-year amortization). Assume that paymentsare made ANNUALLY. The terms are outlined below:Loan 1Loan 2LTV62.5%70.0%Rate6.375%6.875%Fees (total)$55,000$77,000Calculate the incremental cost for the extra funds provided by loan 2. Hint:Remember that the loan will not be outstanding a full 25 years.ENTER YOUR ANSWER AS A DECIMAL WITH 4 PLACES. IF YOUR ANSWER

DataLoan 1Loan 2Loan-to-Value62.50%70.00%Rate6.375%6.875%Fees (Total)$55,000$77,000

You are offered loans from two competing lenders on the purchase of a $6.5 million property for a 5-year term (25-year amortization). Assume that payments are made ANNUALLY. The terms are outlined below: Loan 1 Loan 2 LTV Rate 62.5% 70.0% 6.375% 6.875% Fees (total) $55,000 $77,000 Calculate the incremental cost for the extra funds provided by loan 2. Hint: Remember that the loan will not be outstanding a full 25 years. ENTER YOUR ANSWER AS A DECIMAL WITH 4 PLACES. IF YOUR ANSWER

You are offered loans from two competing lenders on the purchase of a $6.5 million property for a 5-year term (25-year amortization). Assume that payments are made ANNUALLY. The terms are outlined below: Loan 1 Loan 2 LTV Rate 62.5% 70.0% 6.375% 6.875% Fees (total) $55,000 $77,000 Calculate the incremental cost for the extra funds provided by loan 2. Hint: Remember that the loan will not be outstanding a full 25 years. ENTER YOUR ANSWER AS A DECIMAL WITH 4 PLACES. IF YOUR ANSWER

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter19: Lease And Intermediate-term Financing

Section: Chapter Questions

Problem 18P

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