What is the effective annual rate

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Reference no: EM131200218

An individual is borrowing $175,000 for a 20 year loan at 3.95% per year compounded monthly.

A. Compute the monthly payment.

B. Immediately after the 104^th monthly payment, the home owner plans to sell the house. How much money is owed back to the bank?

C. What is the effective annual rate(., what is the rate you would use to compute annual instead of monthly payments)?

Draw all cash flow diagrams

Reference no: EM131200218

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