A borrower has arranged a $105,000 face value, bonused mortgage loan with a broker at an interest rate of 10.8% compounded semiannually. Monthly payments are based on a 15-year amortization. A $5000 placement fee will be retained by the broker.
What is the effective annual cost of the funds actually advanced to the borrower if the contractual interest rate is for
a. a five-year term?
b. a 10-year term?
c. the entire 15-year amortization period?

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The Answer of A borrower has arranged a $105,000 face value, bonused mortgage loan with a broker at an interest rate of 10.8% compounded semiannually. Monthly payments are based on a 15-year amortization. A $5000 placement fee will be retained by the broker.
What is the effective annual cost of the funds actually advanced to the borrower if the contractual interest rate is for
a. a five-year term?
b. a 10-year term?
c. the entire 15-year amortization period?

A Borrower Has Arranged a $105,000 Face Value, Bonused Mortgage