You purchase an office building at $5,000,000 with a loan to value ratio of 60.00%. Interest rates are at 5.25% and loan amortization periods are at 25 years. Calculate the monthly loan payment.

To calculate the monthly loan payment for the office building, we will follow these steps:

1. **Determine the loan amount**:  
   Loan to value ratio (LTV) = 60.00%  
   Total value of the property = $5,000,000

   Loan amount = $ 60\% \times 5,000,000 = 0.60 \times 5,000,000 = 3,000,000 $

2. **Use the loan amortization formula** to calculate the monthly payment:
   \[
   M = \frac{P \cdot r \cdot (1 + r)^n}{(1 + r)^n - 1}
   \]
   where:  
   - $ M $ = monthly payment  
   - $ P $ = loan amount = $3,000,000  
   - $ r $ = monthly interest rate = $ \frac{5.25\%}{12} = \frac{0.0525}{12} $  
   - $ n $ = total number of payments = 25 years × 12 months = 300 months

Let me compute the monthly payment.The monthly loan payment for the office building is approximately **$17,977.43**.

Would you like more details or have any questions?

Here are some related questions:
1. How is the loan-to-value ratio determined for a property purchase?
2. What factors influence the interest rate on commercial property loans?
3. How does amortization period affect total loan payments?
4. What happens to the monthly payment if the interest rate increases to 6%?
5. How do property taxes and maintenance affect the overall cost of owning a building?

**Tip:** Lowering the loan-to-value (LTV) ratio can reduce the loan amount, leading to lower monthly payments.

Calculate the monthly loan payment for a $5,000,000 office building with a 60% loan-to-value ratio, 5.25% interest rate, and 25-year amortization period. Understand how the amortization formula applies to real estate loans and determine the exact monthly payment of $17,977.43.

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