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You have a choice of two fully amortizing 20-year mortgage loans with monthly payments: (1) a $250,000 loan with a 3.5% annual rate of interest

You have a choice of two fully amortizing 20-year mortgage loans with monthly payments: (1) a $250,000 loan with a 3.5% annual rate of interest or (2) a $225,000 loan with a 3% annual rate of interest. What is the effective annual rate of interest on the additional $25,000 borrowed on the first loan

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