What is the effective annual cost to the borrower, Finance Basics

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What is the effective annual cost to the borrower

(a) What is the effective annual cost to the borrower of a $500,000, 4%, 20-year, fullyamortized home loan, repaid annually, if 2.5% in points (loan closing costs) is charged, and the loan is pre-paid at the end of 5 years with a 1.25% prepayment penalty? (what are the 3 cash flows at the end of 5?)

(b) What is the effective annual cost if the loan goes to maturity?

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Finance Basics: What is the effective annual cost to the borrower

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Finance Basics: What is the effective annual cost to the borrower

Reference No:- TGS0725830

Have a Question? (oR Write a Review)

Recent Questions Asked Finance Basics

Q : What is the npv of the proposed project

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Q : What is the effective annual cost to the borrower

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Request for Solution File

Ask an Expert for Answer!!

Finance Basics: What is the effective annual cost to the borrower

Reference No:- TGS0725830

Recent Questions Asked Finance Basics

Q : What is the npv of the proposed project

Q : Specify capacity of electric heater to maintain temperature

Q : How does the use of estimates affect the financial statement

Q : Why did the president take such a drastic action

Q : What is the effective annual cost to the borrower

Q : High-speed drill to accelerate from an angular speed

Q : Wavelength of the electromagnetic wave problem

Q : Determine internal flow convection coefficient

Q : What is the present value today of an ordinary annuity

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