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What is the incremental cost of borrowing the extra money

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Reference no: EM13972379

Question:

A borrower is purchasing a property for $180,000 and can choose between two possible loan alternatives.

The first is a 90% loan for 25 years at 9% interest and 1 point and the second is a 95% loan for 25 years at 9.25% interest and 1 point.

Assuming the loan will be held to maturity, what is the incremental cost of borrowing the extra money?

Reference no: EM13972379

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