A mortgage loan in the amount of $100,000 is made at 6 percent interest for 20 years. Payments are to be monthly in each part of this problem.

Assuming that 3 points are paid at closing and the 20-year loan is prepaid at the end of year 5, what will be the effective rate of interest for each loan in parts a (1) through a (4)?

1) The loan is fully amortizing?

(2) It is partially amortizing

(3) It is a nonamortizing, or interest-only loan?

(4) It is a negative amortizing loan