Calculate upfront charges needed to achieve return

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Reference no: EM132014669

You are working at a financial institution and your immediate supervisor comes to you and tells you that he would like to know the points that should be charged on a loan with a contract interest rate of 8% to make the yield 9.5%? Calculate the upfront charges needed to achieve a return of 9.5%. Also, assume that the loan term is 25 years. Assume the average life of the loan is 10 years.

Reference no: EM132014669

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