Market interest rate from the builder

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Suppose Peter can get a loan with a below-market interest rate from the builder. This fully amortizing FRM loan will have a 80% LTV, 4% interest rate, 30 years amortization period, and with no loan fees. At what price should the builder sell the asset to Peter in order to earn the market rate of interest (4.5%) on the loan? Assume that Peter would have the loan for the entire term of 30 years and the asset would normally sell for $300,000 without any special financing.

Reference no: EM13732320

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