Computing the market rate of interest on the loan

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Question: A builder is offering $100,000 loans for his properties at 9 percent for 25 years. Monthly payments are based on current market rates of 9.5 percent and are to be fully amortized over 25 years. The property would normally sell for $110,000 without any special financing. At what price should the builder sell the properties to earn, in effect, the market rate of interest on the loan?

Reference no: EM131793766

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