You are considering purchasing a house for $785,000, which you plan to finance using an 80%...

You are considering purchasing a house for $785,000, which you plan to finance using an 80% LTV conventional mortgage (i.e. no mortgage insurance will be required). First Bank of American Dreams is offering a 30-year, fully amortizing, fixed-rate mortgage at 4.5% with monthly payments. This loan charges a 1% origination fee, 3 discount points, and a 3% prepayment penalty. First compute the APR and then compute the ER assuming that you will sell the home and pay off the loan in 10 years. For the ER part, you may assume that you never pay anything above the required amount prior to prepaying it at 10 years. Please label your answers clearly as I cannot give you credit for numbers I cannot find. Show me as much work as you can, as that is how I assign partial credit.

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SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

NEED HELP WITH FINANCIAL CALCULATOR, LET ME KNOW

AS NOTHING WAS MENTIONED, SOLVED WITH EXCEL.

i have done this sum earlier, it was asked to round till 4 decimals, so i have done same way

jeff jeffy answered 1 year ago

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