Please include step by step solutions!

1. Compute the effective interest rate on each loan assuming a 25 year, monthly payment amortization schedule and assuming you make a 25 percent down payment.

2. Compute the effective interest rate on each loan assuming the loan is paid off in 20 months.

You are analyzing the purchase of a friend's home. The listing price was $260,000 but the market was so hot they offered 20% more than the asking price; additionally they were very flexible regarding the closing date and have offered to lease the property back to the seller if necessary. These are the lenders they considered Lender Interest Rate Points Union Bank & Trust 4.50% 1.00% Bank of Virginia 4.00% 3.50% Citizens and Farmers 3.75% 4.00% VCU Credit Union 3.50% 6.00% 1. Compute the effective interest rate on each loan assuming a 25 year, monthly payment amortization schedule and assuming you make a 25 percent down payment. 2. Compute the effective interest rate on each loan assuming the loan is paid off in 20 months