You borrow $100,000 using a 30-year fixed rate mortgage with monthly payments. The stated annual interest rate is 10% with monthly compounding. The first payment is due in one year (i.e., t = 1; today is t = 0).

Question 3 Calculate the monthly payments.

Question 4 Calculate the interest for the second payment.

Question 5 Calculate the outstanding balance after making the second payment.

Question 6 Now suppose that the mortgage loan requires an upfront payment (i.e., points) of 1% upon origination of the loan. The mortgage loan payments from question 3 do not change. Calculate the APR for the mortgage. You might want to show your work.