Your local lender offers you a fixed -rate mortgage with the followingterms: $250,000.00 at 7.55% for 30years, monthly payments. The lenderwill charge you 3 discount point(s)and the loan has a 2% prepaymentpenalty for the first 10 years of life.What is the annual percentage rate (APR) of the loan?

The annual percentage rate is an annual interest rate used to represent the cost of borrowing. It…

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What is the annual percentage rate ( APR) of the loan?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 15P

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Question

Your local lender offers you a fixed -
rate mortgage with the following
terms: $250,000.00 at 7.55% for 30
years, monthly payments. The lender
will charge you 3 discount point(s)
and the loan has a 2% prepayment
penalty for the first 10 years of life.
What is the annual percentage rate (
APR) of the loan?

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