1. Tom wants to purchase a property for $300,000. He can borrow a 80% LTV fixed-rate loan, with 4.5% annual interest rate and a 3% origination fee. Or, he can borrow a 90% LTV fixed-rate loan, with 5.5% annual interest rate, and a 3% origination fee. Both loans have a 30 year amortization period. If he plans to prepay the loan at the end of 3rd year, what will be the incremental cost of borrowing for him to to borrow the additional 10% loan amount?
a) 12.25%
b) 14.47%
c) 13.68%
d) 10%
2. What is the steps you would take and data sources you would use to make market feasibility study for new office building?
3. A building owner charges net rent of $20 in the first year, $22 in the second year, and $24 in the third year. Using a 10 percent discount rate, what is the effective rent over the three years?