Effective yield to the lender assuming six points
Course:- Financial Management
Reference No.:- EM13942908

Assignment Help >> Financial Management

Calculate for a loan of $1,000,000 at 5% with monthly payments and a 30 yearterm, the effective yield to the lender assuming 6 points were paid under the following scenarios:

a. if held to maturity.

b. if paid off at end of year 5.

c. if a prepayment penalty of 4% were charged at end of year 5.

Put your comment

Ask Question & Get Answers from Experts
Browse some more (Financial Management) Materials
Swings in foreign direct investment flows into and out of emerging markets contribute to exchange rate volatility. Describe one concrete historical example of this phenomenon
Fly Away, Inc., has balance sheet equity of $6.9 million. At the same time, the income statement shows net income of $855,600. The company paid dividends of $419,244 and has 1
Which of the following is NOT a relevant cash flow and thus should not be reflected in the analysis of a capital budgeting project? Changes in net working capital. Shipping an
The ABC Construction Company is considering the purchase of a diesel power shovel to improve its productivity. The company finances the purchase by borrowing from a local bank
You want to buy a new sports coupe for $73,900, and the finance office at the dealership has quoted you a loan with an APR of 6.3 percent for 72 months to buy the car. What wi
Baba's Warm and Cozy Knitting Supply is considering creating a new line of mittens. The managers think that the new equipment and supply of yarn will cost $340,000. They expec
An electric utility is considering a new power plant in northern Arizona. Power from the plant would be sold in the Phoenix area, where it is badly needed. Because the firm ha
Suppose you borrow $50000 when financing a coffee shop which is valued at $75000. You expect to generate a cash flow of $84000 if demand is as expected. The cost of debt rate.