Use this info to answer next 4 questions. A borrower takes out a 30-year loan for a house worth $250,000. If the annual interest rate is 6%.

1. Refer to the same question, if the borrower chooses to pay $50,000 at the end of year 12, what will be the new loan maturity (IN YEARS) assuming that loan payments are not reduced? Input the answer in YEARS and in two decimal places.

a. 11.90 years

b. 10.80 years

c. 12.48 years

d. 11.34 years

2. Refer to the same question, if the borrower chooses to pay $40,000 at the end of year 12, what will the new payments be assuming the loan maturity will not be reduced?

a. $1,157.70

b. $1,119.80

c. $1,195.61

3. Refer to the same original question, assuming 2.5 points are charged by the lender, what is the effective yield on this loan? (Hint: Don't forget to annualize the answer)

a. 6.24%

b. 6.19%

c. 6.09%

d. 6.14%

d. $1,081.89