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2. A prospective borrower is offered a $500,000 first mortgage loan with interest at 8 percent per annum. Monthly payments will be required to amortize

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2. A prospective borrower is offered a $500,000 first mortgage loan with interest at 8 percent per annum. Monthly payments will be required to amortize the loan over 25 years. Two alternatives are offered: a. A five-year loan with a 1 percent front-end fee or b. A seven-year loan with a 1.5 percent front-end fee

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