Question
In: Finance
4. A borrower takes out a 30-year mortgage loan for $100,000 with an interest rate of...
4. A borrower takes out a 30-year mortgage loan for $100,000
with an interest rate of 6% plus 2 points. What is the effective
annual interest rate on the loan if the loan is carried for all 30
years?
(A) 6.0%
(B) 6.2%
(C) 6.4%
(D) 6.6%
Solutions
Expert Solution
I HAVE SOLVED MANY SUMS. SOME BOOKS ARE WRITING ANNUAL EFFECTIVE COST AS "APR" AND SOME BOOKS "EAR". HERE CONFUSION IS WHAT TO TAKE BECAUSE APR = 6.2% AND EAR = 6.4%
HERE I AM TAKING IT AS EAR = (C) = 6.4%. THANK YOU
jeff jeffy answered 3 months agoRelated Solutions
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$200,000 with monthly payments. The first two years of the loan
have a “teaser” rate of 4%, after that, the rate can reset with a
5% annual payment cap. On the reset date, the composite
rate is 6%. What would the Year 3 monthly payment be? with the way
please.
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