Calculate the loan constant

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a. A property generates $20,000 in net operating income. You purchase the property at a 5% cap rate and then sell the property at a 4% cap rate one year later after receiving the net operating income at the end of the first year. What is your internal rate of return at the end of year 1?

b. A property is purchased for $10,000,000 and financed with a $7,500,000 mortgage loan. The mortgage is based on a 30 year amortization and the annual interest rate is 6.0%. The net operating income for the property is $150,000. Calculate the loan constant.

Reference no: EM132504042

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