Problem:
You have just purchased a new warehouse. To finance the purchase, you've arranged for a 30-year mortgage loan for 80 percent of the $2,600,000 purchase price. The monthly payment on this loan will be $11,000.
Required:
Question: What is the effective annual rate on this loan?
A) 4.98 percent
B) 5.25 percent
C) 5.46 percent
D) 6.01 percent
E) 6.50 percent
Note: Show supporting computations in good form.