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If a lender wants to yield 5% on a 4.25% fixed rate loan, then what fees should the lender charge?

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anthougo

The fee that the lender should charge to ensure they get a yield of 5% on a fixed 4.25% loan is 0.75%.

What is the lender's yield?

The lender's yield is the implicit interest rate charged to the borrower. The lender's yield can also be described as the internal rate of return for the lender, given the loan's discounted cash flows. The lender's yield is usually annualized, it is quoted as a rate per year.

Thus, for the lender to enjoy a yield of 5% on a 4.25% fixed-rate loan, the lender's fees should include at least 0.75% (5% - 4.25%).

Learn more about the lender's yield at brainly.com/answer expert verified here: https://brainly.com/question/9028806

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