A loan with the following terms is being made:Fixed rate, constant monthly payment. Closing date February 9th.Five percent interest rate. Prepaid interest due at closing.$160,000 mortgage loan amount.$2,400 loan discount points to be paid by the buyer or borrower to the lender.25-year term, monthly payments, fully amortizing.Required:Calculate the APR for federal truth-in-lending purposes.Note: (Do not round intermediate calculations. Round your final answer to two decimal places.)APR%

A loan establishes a financial understanding in which a lender provides an agreed sum of funds to a…

Answered: A loan with the following terms is…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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1. A loan with the following terms is being made: Fixed rate, constant payment 9% interest rate $70,000 desired mortgage amount. $1,500 loan discount points paid by the buyer/borrower to the lender 25-year term, monthly payments a. Calculate the APR for federal truth-in-lending purposes (assume that the discount points are paid up front by the borrow and rolled into the loan principal). b. Do you think that the APR calculated in (a) reflects the likely return that the lender will receive over the term of the loan? List specific reasons that the lender's actual return might be different than the APR.
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Hh.169.
For a three-month loan of $5,000 with an interest rate of 10 percent, determine usable funds, the AFC and APY for each of the following four loans (assume a normal deposit balance of $0): a. Regular interest loan (interest paid at maturity) b. Discounted interest loan c. Regular interest loan with a 10% compensating balance requirement d. Discounted interest with a 10% compensating balance requirement

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