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Given the following information about a fully amortizing loan, calculate the effective borrowing cost to the owner (EBC). Loan Amount: $300,000.00 Loan Amortization Term: 30 years Interest Rate: 8.00% compounded monthly Monthly Payment: $-2,201.29 Discount Points: 4 Other Closing Expenses: $4,000.00 Assume the owner pays off the loan early at the end of year: 20

Given the following information about a fully amortizing loan, calculate the effective borrowing cost to the owner (EBC). Loan Amount: $300,000.00 Loan Amortization Term: 30 years Interest Rate: 8.00% compounded monthly Monthly Payment: $-2,201.29 Discount Points: 4 Other Closing Expenses: $4,000.00 Assume the owner pays off the loan early at the end of year: 20

Essentials Of Investments
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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Given the following information about a fully amortizing loan, calculate the effective borrowing cost to the owner (EBC). Loan Amount: $300,000.00 Loan Amortization Term: 30 years Interest Rate: 8.00% compounded monthly Monthly Payment: $-2,201.29 Discount Points: 4 Other Closing Expenses: $4,000.00 Assume the owner pays off the loan early at the end of year: 20
Transcribed Image Text:Given the following information about a fully amortizing loan, calculate the effective borrowing cost to the owner (EBC). Loan Amount: $300,000.00 Loan Amortization Term: 30 years Interest Rate: 8.00% compounded monthly Monthly Payment: $-2,201.29 Discount Points: 4 Other Closing Expenses: $4,000.00 Assume the owner pays off the loan early at the end of year: 20
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