Ruby obtains a $500,000 fully amortizing CPM loan with a 3.25 percent interest rate and term of 30 years. The loan includes 2 points in upfront fees. If Ruby expects to sell the house and repay the loan in 12 years, what is the EIR on the loan?
It is assumed that original loan term is to amortize in 30 years, by annyual payments.
Effective Annual Rate = 3.483451%
Calculation as below:
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