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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
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