A Motel Is Converting Its Rooms into Privately Owned Condominiums

question 87

Multiple Choice

A Motel is converting its rooms into privately owned condominiums. The interest on a $4,900,000, 30-year construction loan is $100,000. What is the rate of interest? Does the rate seem unreasonable?

• A) 5.70%; reasonable
• B) 1.40%; unreasonable
• C) 4.20%; reasonable
• D) 0.07%; unreasonable