A borrower is faced with choosing between two loans. Loan $\backslash ($ A $\backslash )$ is available for $\backslash (\backslash$$ $94,000\backslash )$ 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 $\backslash ($ A $\backslash )$ and Loan $\backslash ($ B $\backslash )?$

b$.$ If the loan is expected to be repaid after five years, what is the effective interest rate for Loan $\backslash ($ A $\backslash )$ and Loan $\backslash ($ B $\backslash )?$

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

Required $\backslash ($ A $\backslash )$

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

Note: Do not round in $\backslash (\{\}\_\{$n$\}^\{2\}\backslash )$ rmediate calculations. Round your final answer to $2$ decimal places. A borrower is faced with choosing between two loans. Loan $\backslash ($ A $\backslash )$ is available for $\backslash (\backslash$$ $94,000\backslash )$ 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 $\backslash ($ A $\backslash )$ and Loan $\backslash ($ B $\backslash )?$

b$.$ If the loan is expected to be repaid after five years, what is the effective interest rate for Loan $\backslash ($ A $\backslash )$ and Loan $\backslash ($ B $\backslash )?$

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

If the loan is expected to be repaid after five years, what is the effective interest rate for Loan and and Loan B$?$

Note: Do not round in $\backslash (\{\}\_\{$n$\}^\{2\}\backslash )$ mediate calculations. Round your final answer to $2$ decimal places.