Suppose, a homeowner borrows $100,000 on a mortgage loan, and the loan is to be repaid with equal monthly payments over a 25-year period. The lender charges 6%, compounded semi-annually. The mortgage term is 5 years fixed. If the homeowner borrows $200,000 on the mortgage loan, what will be effective monthly rate (EFF%m)?

Question 7 options:

a) 0.0059%

b) 0.51%

c) 0.0049%

d) 0.49%