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 $358,000. 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					Using IRR Function
Annual Interest Rate					Yield to Lender
Origination Fee					Effective borrowing cost to borrower
Discount Points					APR
Maturity (in years)
Periods per year					Using RATE Function
					Yield to Lender
					Effective borrowing cost to borrower
	Month	Cash Flow			APR
	0
	1
	2
	3
	4
	5
	6
	7
	8
	9
	10