A property value is $4,000,000, and it has a $3,000,000 loan on it. The annual net operating income is $220,000.

1. Assuming the current interest rate is 3.75% and the amortization schedule is 25 years, if the borrower invested $1,120,000 of cash equity (including closing costs), the borrowers cash on cash return is approximately:

a) 5.50%

b) 3.12%

c) 2.68%

d) 19.64%