View the step-by-step solution to:

# question 1 - Tom wants to purchase a property for \$300,000. He can borrow a 80% LTV fixed-rate loan, with 4.5% annual interest rate and a 3%...

question 1 - Tom wants to purchase a property for \$300,000. He can borrow a 80% LTV fixed-rate loan, with 4.5% annual interest rate and a 3% origination fee. Or, he can borrow a 90% LTV fixed-rate loan, with 5.5% annual interest rate, and a 3% origination fee. Both loans have a 30 year amortization period. If he plans to prepay the loan at the end of 3rd year, what will be the incremental cost of borrowing for him to to borrow the additional 10% loan amount?

I think the answer is :

I chose A :12.25 and its wrong I think the answer is : 13.68 per may calculation. Can you please help me with that question? Thank you.

a: 12.25%

b: 14.47%

c: 13.68%

d: 10%

### Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.

### -

Educational Resources
• ### -

Study Documents

Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

Browse Documents