Question

In: Accounting

You are considering purchasing a small office building for $1,975,000 Your expectations include: First-year gross potential...

You are considering purchasing a small office building for $1,975,000

Your expectations include:

  • First-year gross potential income of $340,000;
  • Vacancy & collection losses equal to 15% of PGI;
  • Operating expenses = 40% of EGI;
  • Capital expenditures = 5% of EGI
  • Mortgage (75% LTV) @ 7%
    • What is debt amount?
  • Mortgage will be amortized over 25 years with a monthly payment
    • What is the monthly payment ?

Can you teach me how to do this on excel? Thank you!

Solutions

Expert Solution

1) Total Debt Amount = Morgage Amount ( Loan ) = $1481250

2) Monthly Payment of Interest $10469.17

Please find the attachment below , if any Question put in the comment box

nper is number of period in excel , pmt function is for periodic loan payment .

ekkarill92 answered 1 year ago
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