16.Suppose that you are contemplating borrowing $175,000 in the form of a 30-year loan with an annual interest rate of 18% with monthly payments and monthly compounding. In order to get the loan you will need to pay a 1% origination fee, 2 discount points, and $750 in third-party closing costs. What will the annual effective borrowing costs be for this loan if you make all 360 payments?

17. Suppose that you are taking out an adjustable-rate mortgage. Use the information provided below to calculate the initial monthly payment for the loan. Assume that the lender will employ monthly payments and monthly compounding.

Amount borrowed: $325,000

Index rate: Prime Rate (Currently 2.5%)

Margin: 250 basis points

Periodic cap: 2 percentage points

Lifetime cap: 5 percentage points

Amortization: 30 years

Please show how to solve using a BA II plus calculator