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You borrow a GPM (graduate payment mortgage) of $10,000 with annual payments and 3-year term. The...

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

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jeff jeffy answered 10 months ago
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