A local mortgage broker has arranged a mortgage loan with a face value of $77,500, which included

Question:

A local mortgage has arranged a mortgage loan with a of $77,500, which included a finder’s fee of $2500. The loan is to be amortized by monthly payments over 20 years at 7% compounded semiannually. What is the actual cost of borrowing, expressed as an effective annual rate, if the contractual interest rate is for
a. A three-year term?
b. A seven-year term?
c. The entire 20-year amortization period? Broker
A broker is someone or something that acts as an intermediary third party, managing transactions between two other entities. A broker is a person or company authorized to buy and sell stocks or other investments. They are the ones responsible for... Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...