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What is the effective borrowing cost on the loan

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Reference no: EM13511050

Assume the following:

Loan Amount:

$100,000

Interest rate:

10 percent annually

Term:

15 years, monthly payments

a. What is the monthly payment?

b. What will be the loan balance at the end of nine years?

c. What is the effective borrowing cost on the loan if the lender charges 3 points at origination and the loan goes to maturity?

d. What is the effective borrowing cost on the loan if the lender charges 3 points at origination and the loan is prepaid at the end of year 9?

Reference no: EM13511050

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