Given the following information, calculate the loan-to-value ratio of this commercial loan. Estimated net operating income in the first year: $150,000, Debt service in the first year: $100,000, Loan amount: $1,000,000, Purchase price: $1,300,000

Question

Quizplus · Accepted Answer

Loan-to-value (LTV) ratio is calculated by dividing the loan amount by the purchase price of the property.

LTV = Loan amount / Purchase price

LTV = $1,000,000 / $1,300,000 = 0.77

Therefore, the loan-to-value ratio is 0.77 or 77%. The best choice is answer B.

Given the Following Information, Calculate the Loan-To-Value Ratio of This