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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
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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

User Daniel Byrne
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1 Answer

5 votes

Answer:

8.375%

Step-by-step explanation:

Calculation for What was the effective yield to the lender

Effective yield=[(1 รท 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%

User Amanpurohit
by
4.8k points
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