1) Tom borrowed $80,000 at a rate of 6.5% from bank for his new house. This is a 30 year monthly paid fully amortized mortgage. By how much would he reduce the amount he owes in the first year?

2) Tom creates a 30-year mortgage of $150,000 with APR 5.6%, monthly paid. What is the percentage he pays for principal in the first month?

3) Wells Fargo gives you an offer of $450,000 at a mortgage rate 5.5%, compounded quarterly. Citi Bank offers you a loan of $550,000 as well, the mortgage rate is 5%, compounded monthly. please calculate the difference of the EAR charged by these two banks.