The information presented here applies to questions 4, 5 and 6. You are financing the acquisition of a small office building with a 5-year commercial loan with 6% annual interest rate and a 20-year amortization period.
If the amount borrowed is $1,250,000 and payments are made on a monthly basis, what is the montly payment?
What is the balloon payment that is due when the loan matures?
If you must pay an origination fee of $60,000 to the lender at the time you receive the loan, what is your effective cost of borrowing?