Suppose that a lender originates a loan for $380,000 at 4.5% for 30 years. This is a fixed rate loan that is fully amortizing with constant monthly payments. The lender charged $2,500 to the borrower in origination fees due at closing. Under the assumption that the borrower pays back the loan at the end of 5 years, computer lender's yield. Report lender's yield as a percent in the numerical box below. E.g. if lender's yield = 12.82% enter 12.82. Round your answer to 2 decimal places.?

Suppose that a lender originates a loan for $380,000 at 4.5% for 30 years. This is a fixed rate loan that is fully amortizing with constant monthly payments. The lender charged $2,500 to the borrower in origination fees due at closing. Under the assumption that the borrower pays back the loan at the end of 5 years, computer lender's yield. Report lender's yield as a percent in the numerical box below. E.g. if lender's yield = 12.82% enter 12.82. Round your answer to 2 decimal places.?

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section4.17: Amortized Loans

Problem 1ST

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1. Let's assume that a loan of $100,000 with an annual interest rate of 6% over 30 years pays monthly payments of $500. a. Calculate the accumulation rate b. Calculate the payment rate . c. Answer : How will the balance of the principal be at the end of the loan in relation to the original amount of the loan? Less, equal or greater? Provide calculations.
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