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ANSWERS AND EXPLANATIONS TO ALL QUESTIONS ARE AT THE END OF THIS DOCUMENT. 1) If I expect the NOI in my first year to be \$550,000, given the assumptions below, what is the maximum loan amount a lender would give me? 1.20 DSCR Market Cap rate of 7.8% 75% LTV 10 year term 25 year amortization Interest rate of 7.0% (monthly compounding) 2) A lender will give you a loan in an amount that produces a Housing Expense Ratio of 28%. What is the maximum the lender would be willing to give you based on the assumptions below: Annual household income of \$82,000 Monthly insurance is \$52.00 Annual real estate taxes (property taxes) are \$3,800 Interest rate of 5.5% Amortization of 30 years 3) Eight years ago, you took out a loan with a 15 year term to purchase a residential apartment building in downtown Madison. Assuming a 7.5% interest rate with amortization over 30 years and a monthly payment of \$3,496.07, calculate the balloon payment if you were to hold the loan until maturity.

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