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Answer: 2 . 6 5 1 % . Please show work! A twenty - year loan of $ 2 7 , 0 0 0 is

Answer: 2.651%. Please show work! A twenty-year loan of $27,000 is negotiated with the borrower agreeing to repay principal and interest at 3%. A level payment of $1,600 will apply during the first ten years, and a higher level payment will apply over the remaining ten years. Each time the lender receives a payment from the borrower, he will deposit the portion representing principal into a sinking fund with an annual effective interest rate of 2%.(This is the amount for replacement of capital.) What is the lender's yield rate on this entire investment? (Round your answer to three decimal places.)

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