i need solution part1 and 2 Yield Maintenance:An investor has a $50,000,000 loan against a property that bears interest-only at 8.00% over the15-year loan term. At loan origination the 10-year treasury rate of interest (i.e. the risk freerate) was 5.50%. Assume it's now the end of year 12 of the loan's term, the lockout period hasexpired and the treasury rates for the 2, 3 and 4-year terms total 1.50%, 2.50% and 3.50%.1. What is the market rate of interest at which the lender can loan proceeds if the borrowerprepaid the loan at the end of year 12?2. What is the difference between the interest rate on the existing loan and the market rate ofinterest?3. What is the difference in monthly payment?4. Compute the present value (Yield Maintenance) of the difference between the existing andmarket monthly payments over the remaining term of the loan.n =PMT =PV =

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Description: i need solution part1 and 2 Yield Maintenance:An investor has a $50,000,000 loan against a property that bears interest-only at 8.00% over the15-year loan term. At loan origination the 10-year treasury rate of interest (i.e. the risk freerate) was 5.

Market interest rate is the rate which is prevailing in the market at present.

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1. What is the market rate of interest at which the lender can loan proceeds if the borrower prepaid the loan at the end of year 12? 2. What is the difference between the interest rate on the existing loan and the market rate of interest?

1. What is the market rate of interest at which the lender can loan proceeds if the borrower prepaid the loan at the end of year 12? 2. What is the difference between the interest rate on the existing loan and the market rate of interest?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter19: Lease And Intermediate-term Financing

Section: Chapter Questions

Problem 20P

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