Two banks in the area offer 30-year, $250,000 mortgages at 5.2percent and charge a $3,900 loan application fee. However, theapplication fee charged by Insecurity Bank and Trust is refundableif the loan application is denied, whereas that charged by I. M.Greedy and Sons Mortgage Bank is not. The current disclosure lawrequires that any fees that will be refunded if the applicant isrejected be included in calculating the APR, but this is notrequired with nonrefundable fees (presumably because refundablefees are part of the loan rather than a fee). What are the EARs onthese two loans? What are the APRs? (Do not round intermediatecalculations and enter your answers as a percent rounded to 2decimal places, e.g., 32.16.)
