Effective annual interest rate

Assignment Help Financial Management

Reference no: EM131445706

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 $110,000 and 3 points are charged, the loan repayment schedule is calculated on a $110,000 loan but the net amount the borrower receives is only $106,700. Assume the interest rate is 1.25% per month. What is the effective annual interest rate charged on such a loan, assuming loan repayment occurs over 348 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 ?

Reference no: EM131445706

Questions Cloud

Is this mortgage conventional mortgage : You are considering buying a house close to the university so that you can devote more time to your academic career. You have estimated that you can afford $3500 per month as a mortgage payment because you plan to rent rooms out to your friends. What..

Find the probability distribution of expected term : let A, B be 2 × 2 games and P2×2 = ( pij) a probability distribution. Show that P is a correlated equilibrium if and only if The payoffs in terms of expected social welfare are as follows.

How can one distinguish between legal and ethical issues : Question: How can one distinguish between legal and ethical issues

Describe the healthcare financing : Describe the healthcare financing from the perspective of the consumer, Explain financing from perspective of the healthcare administration

Effective annual interest rate : 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. What is the effective annual interest rate charged on such a loan, assuming loan repaymen..

Stages of any change within the workplace : Why is it important to evaluate the stages of any change within the workplace to ensure additional hazards have not been created by the proposed change?

Participation and consultation process : Explain why it is essential that an organisation provides WHS outcomes that come from the participation and consultation process.

Discuss the ways technology may negatively impact your life : Take a look at the various technologies that you have in your home (e.g., family or living room). What "common" items would a typical family have today that they could not possibly have had 100 years ago? Discuss the ways technology may negatively ..

Explain payoff doninant and risk dominant : n the following games solved earlier, determine which, if any, Nash equilibrium is payoff dominant, risk dominant, and Pareto-optimal. (a) The Game of Chicken.

User Account

All Pages