If a borrower pays a monthly loan payment of $899.33, what might be the lender's yield assuming no prepayment?

To determine the lender's yield when a borrower makes monthly loan payments of $899.33, it's important to understand how yields are calculated in the context of loans, specifically the yield on a fixed-rate mortgage. The lender's yield reflects the annualized interest rate that the lender effectively earns on the loan based on the monthly payments made by the borrower.

In this scenario, the lender's yield can be derived from the monthly payment amount along with other key factors, which typically include the principal of the loan and the term of the loan. Assuming the loan terms, such as the loan amount and duration, align with the common calculations, the yield can be computed using various financial formulas or a financial calculator that takes the cash flows into account.

The correct answer indicating a lender's yield of 6.09% indicates that, based on the monthly payment of $899.33 and the parameters of the loan, the lender can expect to earn 6.09% annually for the duration of the loan. This percentage reflects the time value of money, considering the monthly payment that will be received over time, making it important for both the lender and borrower in understanding the cost of borrowing and the revenue from lending.

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