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skelet666 [1.2K]
3 years ago
15

Consider an 8.5% loan amortizing at a 25-year rate with monthly payments. What is the maximum amount that can be loaned on a pro

perty where net operating income (NOI) is $500,000 per year, if the underwriting criteria specify a debt service coverage ratio (DSCR) no less than 1.25X?
Business
1 answer:
Leto [7]3 years ago
8 0

Answer:

<u>Maximum Amount that can be loanded = $4139619</u>

Explanation:

DSCR = NOI / Debt Service

Debt Service = Principal + Interest

NOI = $ 500000

Debt Service = 500000 / 125 % = $ 400,000

The loan would be ammortized monthly over a period of 25 years.

Monthly Payment or EMI

E = P×r×(1 + r)n/ ((1 + r)n - 1)

12E = 400,000 = [P×r×(1 + r)n/ ((1 + r)n - 1)] * 12

or, P = 400000 / 0.0966272500154557 = $4139619

<u>Maximum Amount that can be loanded = $4139619</u>

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Its management principles consist of: Division of Labor, authority, discipline, management unit, control unit, Subordination of individual interests to the common good, remuneration, centrality, hierarchy, order, equity, stability, initiative and team spirit.

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irakobra [83]
The cost of the room in dollars is obtained by multiplying the given value with the conversion. This is shown below,
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