Real Estate Math
An Iowa office building is valued at $1,200,000. A bank will lend up to 75% LTV. What is the maximum loan amount?
A$900,000✓ Correct
B$300,000
C$960,000
D$840,000
Explanation
Maximum loan = $1,200,000 x 0.75 = $900,000. The borrower would need at least $300,000 in equity (25% down payment).
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