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kap26 [50]
3 years ago
6

Given the following information, calculate the loan-to-value ratio of this commercial loan: estimated net operating income in th

e first year: $150,000; debt service in the first year: $100,000; loan amount: $1,000,000; purchase price: $1,300,000.
Business
1 answer:
Inessa [10]3 years ago
7 0

Answer:

0.77

Explanation:

Calculation for the loan-to-value ratio

Using this formula

Loan-to-value ratio=Loan amount/ Purchase price

Let plug in the formula

Loan-to-value ratio=1,000,000/1,300,000

Loan-to-value ratio= 0.77

Therefore the loan-to-value ratio of this commercial loan will be 0.77

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