A borrower is faced with choosing between two loans. Loan $A$ is available for $$95,000$ at $6$

percent interest for $30$ years, with $6$ points to be included in closing costs. Loan B would be

made for the same amount, but for $7$ percent interest for $30$ years, with $2$ points to be

included in the closing costs. Both loans will be fully amortizing.

Required:

a$.$ If the loan is repaid after $20$ years, what is the effective interest rate for Loan A and

Loan B$?$

b$.$ If the loan is expected to be repaid after five years, what is the effective interest rate

for Loan A and Loan B$?$

Complete this question by entering your answers in the tabs below.

Required $A$

If the loan is repaid after $20$ years, what is the effective interest rate for Loan A and Loan B$?$

Note: Do not round intermediate calculations.

Round your final answer to $2$ decimal places.