A borrower is approved for a $80,000 mortgage loan at 12% interest with monthly payments over 30 years. The borrower is required to pay 3.5 points.

PART A- Assume that monthly payments begin in one month. What will each payment be?

a $822.89

b. $800.00

c. $794.09

d. $842.58

e. $876.85

PART B- What will the outstanding balance of the loan be after five years assuming you make the first 60 payments exactly on time?

a $75,396

b. $75,957

c. $78,131

d. $80,000

e. $82,576

PART C- Assume the borrower repays the loan after 5 years. What is the effective borrowing cost (EBC) on this loan?

a 12.96%

b. 12.00%

c. 12.48%

d.12.76%

e. 13.05%

PART D- Assume the loan is paid after five years and that the terms of the loan call for a prepayment penalty of 3% of the outstanding loan balance. What is the amount owed to the lender?

a. $77,658

b. $78,236

c. $80,474

d. $82,400