Calculate the effective annual cost of borrowing for each of the following three financing alternatives. All interest rates are for a 7-year term and all mortgages use a 20-year amortization to calculate the monthly payments. Bank B will lend $90,000 at 10.75% compounded semiannually. Credit union C will lend $90,000 at 10.5% compounded monthly. Mortgage broker M will lend $93,000 at 10.25% compounded semiannually but will retain $3000 as a brokerage fee.

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The Answer of Calculate the effective annual cost of borrowing for each of the following three financing alternatives. All interest rates are for a 7-year term and all mortgages use a 20-year amortization to calculate the monthly payments. Bank B will lend $90,000 at 10.75% compounded semiannually. Credit union C will lend $90,000 at 10.5% compounded monthly. Mortgage broker M will lend $93,000 at 10.25% compounded semiannually but will retain $3000 as a brokerage fee.

Calculate the Effective Annual Cost of Borrowing for Each of the Following