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- 2011-7-11
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REAL ESTATE - mortgage balance on ERAT
encountered a problem on SCH practice exams Vol 1:
Page 150, Q34.
this is really confusing...
when computing ERAT, the mortgage balance is the ORIGINAL BORROWING AMOUNT?
it is financed with a 7% annual rate loan with 80% of initial outlay - 80%*40000000=32000000
in the answer it states:
ERAT=selling price - selling cost - mortgage balance - tax on sale
other components can I understand, except it says mortgage balance is 32000000??
isn't it to be the mortgage balance on the 5th year when the asset is sold out?
cannot really get it.. |
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发表于 2011-7-11 19:42
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