User Account

All Pages

What is the effective borrowing cost for loan

Assignment Help Finance Basics
Reference no: EM133076018

A borrower would like to borrower $60,000 to finance a property for 30 years at 12% interest. He will only hold this investment for 5 years. The lender indicates that loan fees (origination and discount points) equal to 1.5% of the loan amount will be charged to obtain the loan. Additionally, there will be a 1.0% prepayment penalty. What is the effective borrowing cost for this loan?

Please fully explain the math and reasoning, Thankand how to do in excel as well.

Reference no: EM133076018

Questions Cloud

Compute the macaulay duration : Consider a 10-year Bond A which has a face value $100 and pays coupon every 6 months. The coupon rate is 6% per year, and the next payment is 6 months later.
Initial margin percentage : You short 25,000 shares of FaceSpace, Inc. at $320/share. The initial margin requirement is 50% and the maintenance margin is 35%.
Employee performance evaluation : Based on our own experience, what should be included in an employee performance evaluation?
Sharp ratio of portfolio : Currently, the Sharp ratio of your portfolio is 3. Can you find the new Sharp ratio of your portfolio if its expected return stays the same, its total risk (sta
What is the effective borrowing cost for loan : A borrower would like to borrower $60,000 to finance a property for 30 years at 12% interest. He will only hold this investment for 5 years.
Conducting the literature review : When conducting the literature review for your research, when do you feel you need to start searching for literature?
Acquisition of pacificorp by berkshire hathaway : Market reaction: What does the stock market seem to say about the acquisition of PacifiCorp by Berkshire Hathaway?
Paper volkswagen dieselgate scandal : Paper Volkswagen's Dieselgate Scandal should illustrate a public instance of project failure in which the proper application of project management
What is international arbitrage : What is international arbitrage? Please explain thoroughly thanks

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd