Question: 9. Consider the following below market financing problem for two identical homes (assume monthly payments): A B Price $140,000 $120,000 Loan Balance $90,000 $90,000 (assumable)

9. Consider the following below market financing problem for two identical

9. Consider the following below market financing problem for two identical homes (assume monthly payments): A B Price $140,000 $120,000 Loan Balance $90,000 $90,000 (assumable) (new loan) Down payment $50,000 $30,000 1 7% 8% Term 20 Years 20 Years a. What is the rate of return on the $20,000 investment in the first alternative

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