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PLEASE SHOW WORK A fully amortizing loan has the following terms and conditions: Interest Rate: 6% per annum Term: 20 years Original Loan Amount: $395,000

PLEASE SHOW WORK

A fully amortizing loan has the following terms and conditions:

Interest Rate: 6% per annum

Term: 20 years

Original Loan Amount: $395,000

If the lender expects the loan to be paid over the entire 20-year term, how many points (in dollars and in percentage terms) would the lender have to charge to achieve a 6.5% yield on this loan?

If the lender expects the loan to be paid off with a single lump-sum, additional principal payment at the end of the 10th year, how many points (in dollars and in percentage terms) would the lender have to charge to achieve a 6.5% yield on this loan?

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