1. what is the effective yield on a 35-year fixed rate mortgage if 12 points are

Question

1. what is the effective yield on a 35-year fixed rate mortgage if 12 points are charged and the nominal interest rate is 5.75 assuming monthly compounding?

2. What will be the mortgage balance remaining on a loan of $234,000 with a 35 year term (monthly compounding) and k=.055 after the 21st payment?
3. Mr. Anthony Banderus obtained a bullet loan of $173,000 at a nominal rate of interest of 4.75 percent for seven years. if the repayment is scheduled at the end of each month, obtain the level of the first 83 payments.
1. what is the effective yield on a 35-year fixed rate mortgage if 12 points are charged and the nominal interest rate is 5.75 assuming monthly compounding?

2. What will be the mortgage balance remaining on a loan of $234,000 with a 35 year term (monthly compounding) and k=.055 after the 21st payment?
3. Mr. Anthony Banderus obtained a bullet loan of $173,000 at a nominal rate of interest of 4.75 percent for seven years. if the repayment is scheduled at the end of each month, obtain the level of the first 83 payments.
1. what is the effective yield on a 35-year fixed rate mortgage if 12 points are charged and the nominal interest rate is 5.75 assuming monthly compounding?

2. What will be the mortgage balance remaining on a loan of $234,000 with a 35 year term (monthly compounding) and k=.055 after the 21st payment?
3. Mr. Anthony Banderus obtained a bullet loan of $173,000 at a nominal rate of interest of 4.75 percent for seven years. if the repayment is scheduled at the end of each month, obtain the level of the first 83 payments.

Explanation / Answer

The formuale is :
[(2*nominal interest/12)+(point charged/(years*12))/2*(1-point charged)]*12

Here nominal interest=5.75%
point charged=.12
yers=35

effective yield=6.89%

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