Create an Account

Already have account?

Forgot Your Password ?

Home / Questions / Home loans typically involve points which are fees charged by the lender Each point charge...

Home loans typically involve points which are fees charged by the lender Each point charged means that the borrower must pay 1of the loan amount as a fee For example if the loan is for

Home loans typically involve “points,” which are fees charged by the lender. Each point charged means that the borrower must pay 1% of the loan amount as a fee. For example, if the loan is for $170,000 and 4 points are charged, the loan repayment schedule is calculated on a $170,000 loan but the net amount the borrower receives is only $163,200. Assume the interest rate is .75% per month. What is the effective annual interest rate charged on such a loan, assuming loan repayment occurs over 156 months? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Use a financial calculator or Excel.)

 

Apr 03 2020 View more View Less

Answer (Solved)

question Subscribe To Get Solution

Related Questions