Assume that the loan amount is $250,000 and confirm your answer by calculating monthly payments. (The two monthly payments will not be identical, due to round-off error.)
1. The APR for a 25-year mortgage at 9% interest compounded monthly and with two discount points is
(a) 8.75%.
(b) 9.05%.
(c) 12%.
(d) 9.25%.
2. The APR for a 30-year mortgage at 5.9% interest compounded monthly and having one discount point is
(a) 9%.
(b) 6%.
(c) 5.7%.
3. The APR for a 20-year mortgage at 5.5% interest compounded monthly and with four discount points is
(a) 6%.
(b) 5%.
(c) 6.5%.
4. The APR for a 25-year mortgage at 9% interest compounded monthly and having four discount points is
(a) 8.5%.
(b) 9.5%.
(c) 11%.