A mortgage lender and a borrower agree on a $3,000,000 partially amortizing commercial mortgage loan for...

A mortgage lender and a borrower agree on a $3,000,000 partially amortizing commercial mortgage loan for 10 years requiring equal annual repayments and a balloon payment of $1,500,000 at loan maturity.

1. If the interest rate on the loan is 8% annually, what will be the periodic amount of debt service due?

2. If the borrower chooses to prepay the loan after 5 years, what will be the total payment due at the end of year 5?

Expert Solution

jeff jeffy answered 4 months ago

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