a) Assume you buy a home and borrow $125,000 at 6.4% for 20 years. You pay a total of $6,238 for origination fee, points, and mortgage insurance. In addition you pay other loan costs of $2,182. You pay the first years hazard insurance premium of $385 and are required to deposit $295 into an escrow account. What is the reportable APR?

b) Assume you buy a home and borrow $125,000 at 6.4% for 20 years. You pay a total of $6,238 for origination fee, points, and mortgage insurance. In addition you pay other loan costs of $2,182. You pay the first years hazard insurance premium of $385 and are required to deposit $295 into an escrow account. What is the real APR, assuming the loan is not paid off early?

c) You currently owe $118,580.44 on your mortgage loan, with an interest rate of 6.8%. Interest rates are currently 6.2% and you are thinking about refinancing, in which case you will borrow $120,000 for 15 years. You will incur loan costs of $2,150 on the new loan (payable in cash when you get the loan). You must also pay a $3,000 prepayment penalty on the old loan for paying it off early. Calculate your real APR on the new loan, assuming you do not pay it off early.

d) You buy 20 mutual fund shares at a price of $57.40 per share. You elect to reinvest distributions and, as a result, own 27.47 shares in 4 years. You sell the shares at a price of $66.30 per share, less brokerage fees of $30. Calculate your annual rate of return.