Question: 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

Home loans typically involve points, which are fees charged by the

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 $120,000 and 4 points are charged, the loan repayment schedule is calculated on a $120,000 loan but the net amount the borrower receives is only $115,200. Assume the interest rate is 0.75% per month. What is the effective annual interest rate charged on such a loan, assuming loan repayment occurs over 336 months? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Use a financial calculator or Excel.) Effective annual interest rate %

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Mesmerizing Marketers (MM) is a marketing company that offers a variety of marketing offerings to its customers, including TV commercial production, app construction, and Facebook page creation. MM...

A store will give you a 1.25% discount on the cost of your purchase if you pay cash today. Otherwise, you will be billed the full price with payment due in 1 month. What is the implicit borrowing...

Mortgage with Points. Home loans typically involve points, which are fees charged by the lender. Each point charged means that the borrower must pay 1 percent of the loan amount as a fee. For...

36. Mortgage with Points. 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,...

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...

Hello please answer to the following question. good luck 29. Annuities. You can buy a car that is advertised for $24,000 on the following terms: (a) pay $24,000 and receive a $2,000 rebate from the...

Need assistance with Home work. Attached is the questions Farida Chapter 5 1. Old Time Savings Bank pays 3% interest on its savings accounts. If you deposit $2,700 in the bank and leave it there (Do...

attached file- plz help this s finance and i am so confused...if you can explain too the would be great 1. Old Time Savings Bank pays 5% interest on its savings accounts. If you deposit $1,700 in the...

Compute rs and test H0: ps = 0 versus Ha: ps > 0 for the direct labor cost data below. Batch Size, x Direct Labor Cost, y 71 663 381 138 861 145 493 548 251 1,024 435 772 5 62 35 12 83 14 46 52 23...

Managerial accounting is an important part of any enterprises management information system. Name two other information systems that supply information to management.

( COULD YOU PLEASE SHOW ME HOW TO SET THIS UP IN EXCEL AS WELL AS SOLVE ) The comparative balance sheets for 2 0 2 4 and 2 0 2 3 and the statement of income for 2 0 2 4 are given below for Wright...

How do U.S. residents who travel overseas for leisure differ from those who travel for business? The following is the breakdown by occupation. Explain why we cant use a chi-square test to learn...

Find the general solution of x 4 y'' + x 3 y' - 4x 2 y = 1 given that y 1 = x 2 is a solution of the associated homogeneous equation.

Explain the relationship between changes in interest rates and bond prices.

The supplies account had a beginning balance of $4,085 and was debited for $7,810 for supplies purchased during the year. Journalize the adjusting entry (include an explanation) required at the end...

A time-and-motion study measures the time required for an assembly line worker to perform a repetitive task. The data show that the time X required to bring a part from a bin to its position on an...

One of your co - workers stated that he thought business continuity planning was a heartless, bottom line driven exercise that cared only about the money and not about anything else. You disagree....

4. Explain how to use fair disciplinary practices.

3. Give examples of four fair disciplinary practices.

1. Chip Conley, founder of Joie de Vivre Hospitality, believes that most companies frame their financial incentives in the wrong way. Explain what he means. What does JDV do differently?