Suppose you borrow $200,000 at 5% for 30 years, monthly payments. You pay 2 discount points....

Suppose you borrow $200,000 at 5% for 30 years, monthly payments. You pay 2 discount points.
A. (1 pt) Your APR on this loan is 5.375%. What amount of other financing fees did you pay?
B. (1 pt) Suppose that your effective cost over a five-year holding period is 5.625%. What amount of other fees did you pay?

Solutions

Expert Solution

Part A: If APR is 5.375%, other fees paid= $4,268.14

Part B: If effective cost of 5 year holding period is 5.625%, other fees paid= $1,238.10

Calculation as below:

jeff jeffy answered 2 years ago

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