Question (2) Assuming typical loan terms of 20-year amortization at 8 percent; a stabilized annual net...

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Answer 1

Answer #1

DSC = Net Operating income/ Installment

1.25 = 136000/ Installment

INSTALLMENT = 136000/1.25

Installment = 108800

Loan amount = Installment/ Loan constant _{8%, 20 years}

= 108800/0.100373

= 1083956

That means first option is correct the maximum loan amount available is equal to 1083956.

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Answer 2

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