A professional couple wishes to purchase a new home costing \($750\),000, make a 20 percent down payment, and finance the remaining \($600\),000. The rate quoted for a conventional 30-year loan is 6.5084 percent interest with 1.875 points and no other closing costs.

a. What is the amount of the monthly payment if the points are paid at the time of closing and not added to the loan? Calculate this using both Excel® and one of the Web-based calculators.

b. What is the amount of the monthly payment if the points are added to the loan? Calculate this using both Excel® and one of the Web-based calculators.

c. If, immediately after the one hundred twentieth payment (10 years), the professional couple decides to sell the house, what will be the unpaid balance on the loan with the points added to it?

d. Determine the effective annual interest rate for the loan with points added to it.

e. Use the additive approach to determine the APR using both Excel® and one of the Web-based calculators.