Suppose you take out the following loan to finance the purchase of a small commercial office building: $2,750, 25-year term fully amortizing, at a 3% interest rate. What is the lender’s yield if it charges two discount points and you use the entire 25-year term to pay off the loan ( rounded to 2 decimal places )?
I) 2.82%
II) 2.95%
III) 3.00%
IV) 3.19%
What is your EBC on the loan described above if in addition to the two discount points you paid $10,000 in closing costs to close the loan and you then sell the office building after 7 years and pay off the loan at the sale ( round to 2 decimal places)
I) 3.00%
II) 3.18%
III)3.35%
IV) 3.42%
