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Given the following information about a fully amortizing loan, calculate the lender's yield (rounded to the nearest tenth of a percent). Loan amount: $166,950, Term: 30 years, Interest rate: 8 %, Monthly Payment: $1,225.00, Discount points: 2.

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Answer:

8%

Explanation:

We use the RATE formula to find out the lender yield that is shown on the attachment

Given that,  

Present value = $166,950

Future value or Face value = $10

PMT = 1,225

NPER = 30 × 12 = 360

The formula is shown below:  

= Rate(NPER;PMT;-PV;FV;type)  

The present value come in negative  

So, after solving this, the monthly rate is 0.67%

Annually rate =  0.079

i.e 8%

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