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Calculate the yield to the lender assuming the loan

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An insurance company is negotiating contract terms on a $100m commercial mortgage loan with a potential borrower. The loan in question is a monthly payment, 20-year amortization, fixed rate balloon with a seven-year term (i.e., maturity), and annual interest rate of 5.85% and 1.5 points of disbursement discount. Calculate the yield to the lender assuming the loan is held to the end of the term (assume a loan amount of $100, ignore the millions).

Reference no: EM132698076

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