. Origination Fees and Discount Points without Prepayment lender is offering a 30-year, monthly payment fixed rate mortgage (FRM) loan at 4.5% with an $800 origination fee and 2.5 iscount points. A borrower wants a loan for $538,000. What is the yield to the lender, the effective borrowing cost to the orrower, and the APR assuming the loan is held to maturity? Use both the IRR and RATE functions in the green ghlighted cells as indicated. oan Amount nnual Interest Rate rigination Fee iscount Points Maturity (in years) eriods per year $538,000.00 4.50% $800.00 2.50% Month 30 12 0 Cash Flow $522.750.00 Using IRR Function Yield to Lender Effective borrowing cost to borrower APR Using RATE Function Yield to Lender Effective borrowing cost to borrower APR 4.73% 4.73% 4.73% 4.73% 4.73% 4.73%
. Origination Fees and Discount Points without Prepayment lender is offering a 30-year, monthly payment fixed rate mortgage (FRM) loan at 4.5% with an $800 origination fee and 2.5 iscount points. A borrower wants a loan for $538,000. What is the yield to the lender, the effective borrowing cost to the orrower, and the APR assuming the loan is held to maturity? Use both the IRR and RATE functions in the green ghlighted cells as indicated. oan Amount nnual Interest Rate rigination Fee iscount Points Maturity (in years) eriods per year $538,000.00 4.50% $800.00 2.50% Month 30 12 0 Cash Flow $522.750.00 Using IRR Function Yield to Lender Effective borrowing cost to borrower APR Using RATE Function Yield to Lender Effective borrowing cost to borrower APR 4.73% 4.73% 4.73% 4.73% 4.73% 4.73%
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Hai Mortgage Icepts Excel Assignment: Module 7
1. Origination Fees and Discount Points without Prepayment
A lender is offering a 30-year, monthly payment fixed rate mortgage (FRM) loan at 4.5% with an $800 origination fee and 2.5
discount points. A borrower wants a loan for $538,000. What is the yield to the lender, the effective borrowing cost to the
borrower, and the APR assuming the loan is held to maturity? Use both the IRR and RATE functions in the green
highlighted cells as indicated.
Loan Amount
Annual Interest Rate
Origination Fee
Discount Points
Maturity (in years)
Periods per year
$538,000.00
4.50%
$800.00
2.50%
Month
30
12
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Cash Flow
-$523,750.00
$2,725.97
$2,725.97
$2,725.97
$2,725.97
$2,725.97
$2,725.97
$2,725.97
$2,725.97
$2,725.97
$2,725.97
$2,725.97
$2,725.97
$2,725.97
$2,725.97
$2,725.97
$2,725.97
$2,725.97
$2,725.97
$2,725.97
$2.725.97
Using IRR Function
Yield to Lender
Effective borrowing cost to borrower
APR
Using RATE Function
Yield to Lender
Effective borrowing cost to borrower
APR
4.73%
4.73%
4.73%
4.73%
4.73%
4.73%
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