What is the yield to the lender on a $300,000 loan at 5.50 percent interest, with monthly payments amortized over 30 years if the lender charges 3 points at origination, and the loan is outstanding for the full loan term which is fifteen years? Group of answer choices A. 6.60% B. 6.50% C. 5.84%

What is the yield to the lender on a $300,000 loan at 5.50 percent interest, with monthly payments amortized over 30 years if the lender charges 3 points at origination, and the loan is outstanding for the full loan term which is fifteen years? Group of answer choices A. 6.60% B. 6.50% C. 5.84%

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter19: Lease And Intermediate-term Financing

Section: Chapter Questions

Problem 14P

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Concept explainers

Effective Interest Rate

The term interest rate can be defined as the amount that is charged by the lender as a percentage on the principal amount. Interest rate which is charged annually is known as annual percentage rate.

Question

Manshukh

What is the yield to the lender on a $300,000 loan at 5.50 percent interest, with
monthly payments amortized over 30 years if the lender charges 3 points at
origination, and the loan is outstanding for the full loan term which is fifteen years?
Group of answer choices
A. 6.60%
B. 6.50%
C. 5.84%
D. 6.89%

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