Use the following information to answer Q1-2. You are applying for a mortgage, and you know the most you can afford to pay is $1,300 every week (52 payments per year). You have been quoted an APR of 4.95% with semi-annual compounding and you plan to amortize the cost of the house over 25 years. 1. What is the effective periodic rate? A. 0.0941% B. 0.0952% C. 0.0964% D. 2.5740% E. 1.1899% Answer: A 2. Based on what you can afford to pay weekly, what is the maximum amount you can borrow? A. 273,139.83 B. 963,332.22 C. 969,234.60 D. 974,869.37 E. 3,310,112.67
