At age 19, annette peterson is in the middle of her second year of studies at a community college in san diego. She has done well in her course work; majoring in prebusiness studies, she currently has a 3.75 gpa. Annette lives at home and works part-time as a filing clerk for a nearby electronics distributor. Her parents can't afford to pay any of her tuition and college expenses so she's virtually on her own as far as college goes. Annette plans to transfer to ut next year (she has already been accepted) after talking with her counselor, annette feels she won't be able to hold down a part time job and still manage to complete her bachelors degree program at Texas in 2 years. Knowing that on her 22nd birthday she will receive approximately $35,000 from a trust fund left by her grandmother

Annette has decided to borrow against the trust fund to support herself during the next 2 years. She estimates that shell need $25000 to cover tuition room and board books and supplies travel personal expenditures and so on during that period. Unable to qualify for any special loan programs, annette has found two sources of single payment loans each requiring a security interest in the trust proceeds as collateral. The terms required are as follows:

a. California state bank will lend $30000 at 8 percent discount interest. The loan principal would be due at the end of 2 years

b. national bank of san diego will lend $25000 under a 2-year note. The note would carry a 10 percent simple interest rate and would also be due in a single payment at the end of 2 years

1. how much would annette A receive in initial loan proceeds and B be required to reapy at maturity under the California state bank?

2. compute A the finance charges B the apr on the loan offered by both banks

3. how big of a loan payment would be due at the 2 years

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