Calculate debt service - interview

if anyone could explain how to calculate the debt service, I would appreciate it:

You buy a property: Value is $100,000. Cap rate 5%. (so NOI is $5,000). Bought it at 80% LTV. Cash-on-cash is 10%. What is your debt service?

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I would assume:

20 % Equity = 20,0000

NOI = 5,000

Debt services = 3,000

Free cash flow = 2,000

Cash-on-cash = 2,000 / 20,000 = 10 %

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Authored by: Certified Real Estate Professional - Vice PresidentCertified Real Estate Pro

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Calculate debt service - interview

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Calculate debt service - interview

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