A borrower can obtain an 80 percent loan with an 8 percent interest rate and monthly payments. The loan is to be fully amortized over 25 years. Alternatively, he could obtain a 90 percent loan at an 8.5 percent rate with the same loan term. Th

Problem 6-1A borrower can obtain an 80 percent loan with an 8 percent interest rate and monthly payments. The loan is to be fully amortized over 25 years. Alternatively, he could obtain a 90 percent loan at an 8.5 percent rate with the same loan term. The borrower plans to own the property for the entire loan term. spnova-new-dynamic-txt  spnova-new-dynamic-txtRequired: spnova-new-dynamic-txta. What is the incremental cost of borrowing the additional funds? (Hint: The dollar amount of the loan does not affect the answer.) spnova-new-dynamic-txtb. What is the incremental cost of borrowing the additional funds if 2 points were charged on the 90 percent loan? spnova-new-dynamic-txtc. What is the incremental cost of borrowing the additional funds if the borrower planned to own the property for only five years? spnova-new-dynamic-txt spnova-new-dynamic-txt

 

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