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2. What is the difference in the first years return on equity between LTV of 50% and interest rate of 4% and LTV of 70% and interest rate of 3.5%? Everything else the same. Term is 25 years with monthly payments. Purchase price if $1,000,000. Rent, net of expenses, is 70,000.

2 Period 1 Purchase LTV Interest Term Compound t r PMT Loan 1,000,000 0.5 0.04 25 12 300 0.003333333 2,639 500,000 1,000,000 0.7 0.035 25 12 300 0.002916667 3,504 700,000 OOOO voor AWN- Begin 700,000 698,537 697,070 695,599 694,124 692,644 691,160 689,671 688,178 686,681 685,180 683,674 PMT 3,504 3,504 3,504 3,504 3,504 3,504 3,504 3,504 3,504 3,504 3,504 3,504 Int 2,042 2,037 2,033 2,029 2,025 2,020 2,016 2,012 2,007 2,003 1,998 1,994 Prin 1,463 1,467 1,471 1,476 1,480 1,484 1,488 1,493 1,497 1,502 1,506 1,510 End 698,537 697,070 695,599 694,124 692,644 691,160 689,671 688,178 686,681 685,180 683,674 682,163 Principal Paydown Rent (net of exp) Annual Equity 11,887 70,000 31,670 500,000 17,837 70,000 42,052 300,000 10 11 12 Return on Equity 10.04% 15.26% 2 Period 1 Purchase LTV Interest Term Compound t r PMT Loan 1,000,000 0.5 0.04 25 12 300 0.003333333 2,639 500,000 1,000,000 0.7 0.035 25 12 300 0.002916667 3,504 700,000 OOOO voor AWN- Begin 700,000 698,537 697,070 695,599 694,124 692,644 691,160 689,671 688,178 686,681 685,180 683,674 PMT 3,504 3,504 3,504 3,504 3,504 3,504 3,504 3,504 3,504 3,504 3,504 3,504 Int 2,042 2,037 2,033 2,029 2,025 2,020 2,016 2,012 2,007 2,003 1,998 1,994 Prin 1,463 1,467 1,471 1,476 1,480 1,484 1,488 1,493 1,497 1,502 1,506 1,510 End 698,537 697,070 695,599 694,124 692,644 691,160 689,671 688,178 686,681 685,180 683,674 682,163 Principal Paydown Rent (net of exp) Annual Equity 11,887 70,000 31,670 500,000 17,837 70,000 42,052 300,000 10 11 12 Return on Equity 10.04% 15.26%