Question
2. You want to purchase a house for $400,000. You can borrow up to 80% of the purchase price at 4%, monthly pay based on
2. You want to purchase a house for $400,000. You can borrow up to 80% of the purchase price at 4%, monthly pay based on a 30-year term. However, you must pay the bank two points (2%) upfront. a. What is the effective interest rate based on paying the points only? b. Assume you sell your house after 5 years, what was the effective interest rate on your loan?
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Fundamentals Of Financial Management
Authors: James C. Van Horne
10th Edition
0138596875, 9780138596873
