Week$7\_$Assignment

Due Sunday by $11$:$59$pm Points $100$ Submitting a file upload Available Aug $19$ at $12$am $-$ Aug $25$ at $11$:$59$pm

A loan with the following terms is being made:

Fixed rate, constant monthly payment. Closing date February $9$th$.$

$9\%$ interest rate. Prepaid interest due at closing.

$$70,000$ mortgage loan amount.

$$1,500$ loan discount points to be paid by the buyer$/$borrower to the lender.

$25-$year term, monthly payments, fully amortizing.

Calculate the APR for federal truth$-$in$-$lending purposes.

Do you think that the APR calculated in $($a$)$ reflects the likely return that the lender will

receive over the term of the loan? List specific reasons that the lender$$s actual return might be different from the APR.