5) Loan Sharks love to loan you money today, for the same amount plus a little principal in return a short period later. For example, P.D. Loan is willing to lend you $2,000 for a month, after which you have to pay back $2,500. a. What is the monthly interest rate? b. What is the APR? c. What is the effective annual rate?

6) You bought a house one month ago and took out a 30-year mortgage of $220,000 with monthly payments and an APR of 3.6%. Use the information we already solved for in class (payment and remaining balance) to find: a. What is the payment amount? Round to the nearest dollar. (Weve already done this in class.) b. How much of the second mortgage payment went to the principal? c. What is the current loan balance after the fourth payment? (Use the loan balance = $218,976.50 after the third payment which is what we previously found in class.) d. True/false: With each consecutive payment in an amortized loan, LESS is applied to interest and MORE is applied to principal. e. Once the house is paid off in full, how much total interest did you pay? f. Build a spreadsheet in Excel to check your answers, especially part (e).