What is the lender yield from this loan

Assignment Help Financial Accounting
Reference no: EM132919845

Question - Your bank has written a loan of $550,000 with an initial maturity of 25 years and an interest rate of 7.25% calculated monthly. As there are a variety of up-front costs associated with this loan, you have charged the borrower 1.5 points to cover these costs. You are expecting this loan to be paid out (prepayment) in 12 years, without any additional charges. Payments on this loan occur monthly. Allowing for the expected early repayment what is the lender's yield from this loan?

a. 7.82% per annum

b. 7.55% per annum

c. 7.46% per annum

d. 7.40% per annum

e. None of the above

Reference no: EM132919845

Questions Cloud

Why is the strategic plan important to capital budgeting : Why is the strategic plan important to capital budgeting? What does the Net Present Value (NPV) of a project measure
Determine the appropriate pid controller settings : Determine the appropriate PID controller settings using the following approaches: Direct Synthesis approach (select a reasonable value of c)
Discuss the appropriate accounting treatment to be taken : Hamigo Berhad purchased a plant for RM8 million on 1 May 2018. Discuss the appropriate accounting treatment to be taken by the entity
Calculate the total market value of the firm of xyz ltd : Preference shares were issued 10 years ago and are still selling at par value MPS = Par value. Calculate the total market value of this firm
What is the lender yield from this loan : Payments on this loan occur monthly. Allowing for the expected early repayment what is the lender's yield from this loan
Which of the statements describes variable costs : Which of the statements describes variable costs? Costs that vary on a per-unit basis but remain the same in total as the level of activity changes
Calculate judy income tax : The union recently negotiated a new contract and Judy's salary has been increases to $1300.00. Calculate Judy income tax
Find which bonds will largest percentage increase in price : Assume that all interest rates in the economy decline from 10 percent to 9 percent. Which of the following bonds will have largest percentage increase in price.
What is the current price : Question - What is the current price of a $154,000 Australian 65 day bank accepted bill with yield of 4%

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd