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You bought a house with a $400,000 mortgage. You paid two points ($4,000). The mortgage is a fully amortizing, 30-year, monthly pay in arrears with

You bought a house with a $400,000 mortgage. You paid two points ($4,000). The mortgage is a fully amortizing, 30-year, monthly pay in arrears with a 5.00% coupon. Assuming you sell the house at the end of Year 5, what is the bank’s effective interest rate over this 5 year period?

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