In: Finance
You borrow a GPM (graduate payment mortgage) of $10,000 with annual payments and 3-year term. The interest rate is 10% with $100 origination cost. The payment factors from year 1 to year 3 are as follows: 25%, 50% and 100%
What is the annual payment in the 1st year?
$1,796.22
$3,592.44
$7,184.89
$1,005.29
What is the effective cost of this loan if you holding the loan for 3 years?
10.47%
10.27%
10.67%
None of the above