Question
Ms. Jones made a mortgage 5 years ago for $180,000 at 3.25% interest and a 15 year term. Rates have now risen to 6% for
Ms. Jones made a mortgage 5 years ago for $180,000 at 3.25% interest and a 15 year term. Rates have now risen to 6% for an equivalent loan. Ms. Jones' lender is willing to discount the loan by $17,000 if she will prepay the loan.
Required:
What rate of return would Ms. Jones receive by prepaying the loan?
use TVM on financial calculator to show work
Step by Step Solution
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i Monthly payment at the original rate of 325 126480 calculated using PMT function of Excel Mortgage ...
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Real Estate Finance and Investments
Authors: William Brueggeman, Jeffrey Fisher
14th edition
73377333, 73377339, 978-0073377339
