A $27.0 million mortgage loan from Bank of America fully amortizing over twenty five years at a fixed annual interest rate 6.75% with equal monthly payments and a 1% prepayment penalty has been seasoned for seven years. How much will the borrower have to pay to the lender to pay off the loan at the end of the seventh year? a.$23,290,179 b.$0 c.$23,523,081 d.$27,000,000

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Q: A loan in the amount of $280,000, is contracted over a period of 25 years to finance the purchase of…

A: Here,

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A: Solution:- When an equal amount is paid each period at end of period, it is called ordinary annuity.…

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Q: Question 1 A-One Hundred-Thousand-dollar ($100,000) loan obtained today is to be repaid in equal…

A: Solution Note : As per the Q&A guideline we are required to answer the first 3 subparts only .…

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A: Working note:

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A:

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A: x 3X

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Q: 3. A fully amortizing mortgage is made for $100,000 at 6.5% interest. If the monthly payments are…

A:

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.