What is the yield to the lender on a $300,000 loan at 5.50 percent interest, with monthly payments amortized over 30 years if the lender charges 3 points at origination, and the loan is outstanding for the full loan term which is fifteen years? Group of answer choices A. 6.60% B. 6.50% C. 5.84%

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Effective Interest Rate

The term interest rate can be defined as the amount that is charged by the lender as a percentage on the principal amount. Interest rate which is charged annually is known as annual percentage rate.