Problem 1: You have been approved for a $70,000 loan toward the purchase of a new home at 10% interest. The mortgage is for 30 years. How much are the approximately annual payments of the loan? Hint: Assume you pay yearly.
- $7425
- $8690
- $5740
- None of the above
Problem 2: First Choice Bank pays 9% APR compounded quarterly on its business loans. National Emerald Bank pays 16% APR compounded daily. The EAR for First Choice and National Emerald Bank are:
- 9.31% and 17.35%, respectively
- 9% and 17.50%, respectively
- 9.31% and 17.50%, respectively
- 9% and 17.35%, respectively