Question

A savings and loan agreed to make a $65,000 mortgage at 8% interest for 30 years and charged three points to negotiate the loan. What was the effective yield to the lender

Answer 1

Answer:

8.375%

Explanation:

Calculation for What was the effective yield to the lender

Effective yield=[(1 ÷ 8)*3]+8%

Effective yield=(0.125*3)+8%

Effective yield=0.375+8%

Effective yield=8.375%

Therefore the effective yield to the lender will be

8.375%