If a lender wants to achieve an APR of approximately 7.0% on a 30-year fully amortizing fixed rate loan for $750,000 with a stated annual interest rate of 6.5%, how many points should the lender charge the borrower? 6 3 5 4

If a lender wants to achieve an APR of approximately 7.0% on a 30-year fully amortizing fixed rate loan for $750,000 with a stated annual interest rate of 6.5%, how many points should the lender charge the borrower? 6 3 5 4

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 18P

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Concept explainers

Effective Interest Rate

The term interest rate can be defined as the amount that is charged by the lender as a percentage on the principal amount. Interest rate which is charged annually is known as annual percentage rate.

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