You borrow $12,000 and promise to make payments of $2,771.70 at the end of each year for 5 years.

loan amortization and EAR

You want to buy a car, and a local bank will lend you $30,000. The loan will be fully amortized over 5 years (60 months), and the nominal interest rate will be 7% with interest paid monthly.

1. What will be the monthly loan payment? Round your answer to the nearest cent.

   $

2. What will be the loan's EAR? Round your answer to two decimal places.

   %