Effective yield to the lender assuming six points

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Reference no: EM13942908

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.

Reference no: EM13942908

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