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

90.2K

Verified Solution

Question

Finance

You borrow a GPM (graduate payment mortgage) of $10,000 withannual payments and 3-year term. The interest rate is 10% with $100origination cost. The payment factors from year 1 to year 3 are asfollows: 25%, 50% and 100%
What is the annual payment in the 1^st 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 loanfor 3 years?
10.47%
10.27%
10.67%
None of the above

Answer & Explanation Solved by verified expert

4.4 Ratings (830 Votes)

See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member

Transcribed Image Text

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