# You take out a mortgage loan from First Bank of Terlingua with the following characteristics: compounding period is monthly loan

This problem has been solved!

Do you need an answer to a question different from the above? Ask your question!

## Question:

You take out a mortgage loan from First Bank of Terlingua with the following characteristics:

- compounding period is monthly
- loan is for $200,000
- APR= 6.63% initial maturity is 30 years
- this mortgage loan has no points

Now suppose that First Bank allows you to accelerate your loan payments by paying an additional $100 each month. (We assume that the bank does not charge a fee for exercising this option.) When we take the acceleration into account, what is your effective annual rate? Do not round at intermediate steps in your calculation. Report the rate in percent to three decimal places. Do not type the % symbol.

**Related Book For**

## Fundamentals of Corporate Finance

ISBN: 978-1259024962

6th Canadian edition

Authors: Richard Brealey, Stewart Myers, Alan Marcus, Devashis Mitra, Elizabeth Maynes, William Lim

**View Solution**

Create a free account to access the answer

**Cannot find your solution?**

Post a FREE question now and get an answer within minutes.
* Average response time.