1. Your brother's business obtained a 30-year amortized mortgage loan for $300,000 at a nominal annual rate of 7.0%, with 360 end-of-month payments. The firm can deduct the interest paid for tax purposes. What will the interest tax deduction be for Year 1? a. $18,813.11 b. $24,248.01 c. $20,903.46 d. $20,485.39 e. $19,440.22
2. Amegy Bank offers to lend you $50,000 at a nominal rate of 5.0%, simple interest, with interest paid quarterly. Woodforest Bank offers to lend you the $50,000, but it will charge 6.8%, simple interest, with interest paid at the end of the year. What's the difference in the effective annual rates charged by the two banks? a. 2.07% b. 2.00% c. 1.73% d. 1.71% e. 2.12%