How much more should you be willing to pay for the property, Financial Management

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How much more should you be willing to pay for the property

A seller has offered you a $1,000,000 interest-only 5 year loan at 6% (annual payments), when market interest rates on such loans are 8% (also interest only). Basing your decision on market values (discount using market rate), how much more should you be willing to pay for the property than you otherwise think it is worth, due to the financing offer?

A. Zero, by definition.

B. $26,497

C. $79,854

D. $98,412

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Financial Management: How much more should you be willing to pay for the property

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