Question 9 please

Question 7 (10 points) A property is expected to have NOI of $100,000 the first year. The NOI is expected to increase by 3% per year thereafter. The appraised value of the property is current $1 million and the lender is willing to make a convertible mortgage (instead of a participation loan) that gives the lender the option to convert the mortgage balance into a 60 percent equity position at the end of year 10. That is, instead of receiving the payoff of the mortgage, the lender would own 60 percent of the property. The loan would be for $900,000 with a contract interest rate of 9%, and it would be amortized over 20 years. Assume that the borrower will default if the property value is less than the loan balance in year 10. Further assume that the appraiser would estimate the value in year 10 by dividing the NOI for year 11 by a 10% capitalization rate. What is the lenders BTIRR (in decimals, rounded to 3 digits)? A Question 8 (10 points) What would be the lenders BTIRR if the property only sells for $1 million after 10 years (in decimals, rounded to 3 digits)? Question 9 (10 points) What would be the lenders BTIRR if the property only sells for $500,000 after 10 years (in decimals, rounded to 3 digits)? Note: If the borrower defaults, assume that the lender gets the property and sells it for its estimated resale value of $500,000. Question 7 (10 points) A property is expected to have NOI of $100,000 the first year. The NOI is expected to increase by 3% per year thereafter. The appraised value of the property is current $1 million and the lender is willing to make a convertible mortgage (instead of a participation loan) that gives the lender the option to convert the mortgage balance into a 60 percent equity position at the end of year 10. That is, instead of receiving the payoff of the mortgage, the lender would own 60 percent of the property. The loan would be for $900,000 with a contract interest rate of 9%, and it would be amortized over 20 years. Assume that the borrower will default if the property value is less than the loan balance in year 10. Further assume that the appraiser would estimate the value in year 10 by dividing the NOI for year 11 by a 10% capitalization rate. What is the lenders BTIRR (in decimals, rounded to 3 digits)? A Question 8 (10 points) What would be the lenders BTIRR if the property only sells for $1 million after 10 years (in decimals, rounded to 3 digits)? Question 9 (10 points) What would be the lenders BTIRR if the property only sells for $500,000 after 10 years (in decimals, rounded to 3 digits)? Note: If the borrower defaults, assume that the lender gets the property and sells it for its estimated resale value of $500,000