Calculate the yield maintenance premium, a prepayment penalty on a commercial loan that ensures the lender receives their expected yield.
Yield maintenance is a type of prepayment penalty designed to protect a lender. If a borrower pays off a loan early when interest rates have fallen, the lender loses out on the higher interest they expected to receive. The yield maintenance formula calculates the present value of this lost interest, which becomes the penalty amount. It ensures the lender's overall yield is "maintained" as if the loan had not been prepaid.