For problems $1-5,$ consider a commercial mortgage with an initial balance of $$700,000,$ a

fixed interest rate of $6\mathrm{.}5\%,30-$year amortization, and $1\mathrm{.}75\%$ in origination fees.

What are debt servicing costs?

$$4,424$

$$53,094$

$$12,250$

$$45,500$

What is the remaining mortgage balance if the building is sold after $7$ years?

$$632,914$

$$328,344$

$$700,000$

$$753,094$

How much can the owners deduct in interest expenses in the first year?

$$53,094$

$$45,500$

$$3,772$

$$45,270$

How much can the owners deduct in amortized financing costs in the first year?

$$408$

$$12,250$

$$3,772$

$$9,800$

When the owners sell in year $7,$ how much can they deduct in amortized financing costs?

$$408$

$$12,250$

$$3,772$

$$9,800$