Discussion with lenders indicates that a loan can be obtained fro 75% of a property's market value. Loan terms will probably be 8% interest, 20-year amortization (monthly payments), with the rate renegotiable after 7 years. The property is estimated to be worth $200,000.
a) How much can be borrowed?
b) What will be the annual debt service?
c) What is the expected annual loan constant?
Show all work along with the formulas you used.