Question: Two years ago, a 1 0 , 0 0 0 square foot commercial property was available in Atlanta for $ 1 . 2 million. The

Two years ago, a 10,000 square foot commercial property was available in Atlanta for $1.2 million.
The property was bought using a ten year loan with an annual rate of 3.6%. The investors hoped to
earn an annual return of 10% over the two years. The monthly rent was $11,000 for the first year and
then increased by 10% the second year. (monthly rent the second year was $12,100).
What was the annual return on the investment if the property was sold for $1 million after two years?
What percent increase in the monthly rent over the second year would give an annual return of 10%?
Based on the original rental information, what selling price would give an annual return of 10%?
Create a data table with the monthly return as the output variable. The row input is the percent increase
in the monthly rent (over the second year), start with 10% and go to 14% in increments of 1%. The
column input is the selling price, start with $1 million and go to $1.1 million in increments of $25,000.
Discuss your findings.

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