Final answer:
When prepaying a loan, a yield maintenance penalty may be incurred. The amount of the penalty will depend on various factors, including the interest rate at the time of prepayment and the remaining term of the loan.
Step-by-step explanation:
When prepaying a loan, a yield maintenance penalty may be incurred. This penalty is designed to compensate the lender for the loss of interest they would have received if the loan had been paid off according to the original terms. The amount of the penalty will depend on various factors, including the interest rate at the time of prepayment and the remaining term of the loan. Generally, if interest rates have decreased since the loan was originated, you would expect the yield maintenance penalty to be higher than $10,000.