If given a term of 360 months and a note rate of 7%, what is the lender's yield calculated to be?

To determine the lender's yield given a term of 360 months and a note rate of 7%, one must understand the relationship between the note rate, the yield, and the amortization of the loan. The note rate is the nominal interest rate stated in the loan agreement, while the lender's yield takes into account various factors, such as how the loan is structured, fees, and repayment schedules.

In this case, the lender's yield is calculated considering the impact of the loan's monthly payments on the total interest earned over the loan's term. Given a term of 30 years (360 months) and the nominal interest rate of 7%, we must recognize that the actual yield might be higher than the stated rate due to the compounding effect of monthly payments and potentially additional fees or adjustments.

The calculation involves amortizing the loan and determining the effective interest earned based on the cash flow of the monthly payments. The lender's yield reflects the true rate of return the lender earns, which can be enhanced by the structure of the loan and how payments are made. The detailed calculations would typically be done using financial formulas or software, but experience shows that a lender’s yield often exceeds the note rate due to monthly compounding and the timing of cash