8. 66.

EAR versus APR [LO 6.4] Two banks in the area offer 30-year,

$275 000 mortgages at 5.1 per cent and charge a $4 300 loan application fee. However, the application fee charged by Insecurity Bank is refundable if the loan application is denied, whereas that charged by Newton and Sons Mortgage Bank is not. The current disclosure law requires that any fees that will be refunded if the applicant is rejected be included in calculating the APR, but this is not required with non-refundable fees (presumably because refundable fees are part of the loan rather than a fee). What are the EARs on these two loans? What are the APRs?