Your lending institution charges $5,500 for closing costs on a $245,000 loan
with an APR of 9.5% compounded monthly, with a term of 25 years. The bank
will not allow the closing costs to be added to the $245,000 borrowed. What
effect do the closing costs have on the effective annual interest rate?
Loan amount	$245,000
Closing costs	$5,500
APR	9.5%	(Note: the true APY is		9.925%
n (months)	300
interest/month
interest/month
Payments
"True" amount borrowed
True rate
Effective annual (APY)		<--Answer
APR