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r-ruslan [8.4K]
2 years ago
5

If a lender wants to yield 5% on a 4.25% fixed rate loan, then what fees should the lender charge?

Business
1 answer:
vodka [1.7K]2 years ago
7 0

The fee that the lender should charge to ensure they get a yield of 5% on a fixed 4.25% loan is <u>0.75%</u>.

<h3>What is the lender's yield?</h3>

The lender's yield is the implicit interest rate charged to the borrower. The lender's yield can also be described as the internal rate of return for the lender, given the loan's discounted cash flows. The lender's yield is usually annualized, it is quoted as a rate per year.

Thus, for the lender to enjoy a yield of 5% on a 4.25% fixed-rate loan, the lender's fees should include at least <u>0.75%</u> (5% - 4.25%).

Learn more about the lender's yield at brainly.com/answer expert verified here: brainly.com/question/9028806

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Answer for the question:

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is given in the attachment.

Explanation:

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3 years ago
At the beginning of the year, Vendors, Inc., had owners' equity of $49,850. During the year, net income was $6,150 and the compa
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Explanation:

Based on the information that have been given in the question, the cash flow to stockholders for the year would be calculated as:

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3 years ago
XYZ Corp issued $600,000 of 9% , 10-year bonds on June 30,2020, for $562,500. This price provided a yield of 10% on the bonds. I
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c. $18, 750

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3 years ago
What is one issue on which economists commonly disagree?give an example of each argument?
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quality and price of product

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