Question 1

Some home loans involve "points," which are fees charged by the lender. Each point charged means that the borrower must pay 1% of the loan amount as a fee. For example, if 0.5 point is charged on a $100,000 loan, the loan repayment schedule is calculated on the $100,000 loan, but the net amount the borrower receives is only $99,500. What is the effective annual interest rate charged on such a loan, assuming that loan repayment occurs over 360 months, and that the interest rate is 12% per year?

Question 2

One service provided by checkcashing services is to cash your check the night before you could otherwise receive your money if you were to deposit it into a bank account. However, a fee is attached to this service. Let