Question

A loan for $50,000 is made for 10 years at 8 percent interest and no monthly payments are scheduled. a. How much will be due at the end of 10 years? b. What will be the yield to the lender if it is repaid after 8 years? (Assume monthly compounding.) c. If 1 point is charged in (b) what will be the yield to the lender?

Answer 1

Answer:

I think

50,000 x .08 (convert

8% to a decimal) = interest is $4,000

$4,000 x 10 = $40,000 in interest owed

$40,000 interest + $50,000 borrowed = $90,000 due after 10 year

$4000 x 8 = $32,000 in interest owed

$32,000 interest + $50,000 borrowed = $82,000.00 yielded to lender in 8 years

part c. is cut off I cannot read the rest.

Explanation:

think

50,000 x .08 (convert

8% to a decimal) = interest is $4,000

$4,000 x 10 = $40,000 in interest owed

$40,000 interest + $50,000 borrowed = $90,000 due after 10 year

$4000 x 8 = $32,000 in interest owed

$32,000 interest + $50,000 borrowed = $82,000.00 yielded to lender in 8 years

part c. is cut off I cannot read the rest.