6.

You currently owe $118,580.44 on your mortgage loan, with an interest rate of 6.8%. Interest rates are currently 6.2% and you are thinking about refinancing, in which case you will borrow $120,000 for 15 years. You will incur loan costs of $2,150 on the new loan (payable in cash when you get the loan). You must also pay a $3,000 prepayment penalty on the old loan for paying it off early. Calculate your real APR on the new loan, assuming you do not pay it off early.

	a.	6.90%
b.		7.04%
c.		6.71%
d.		6.80%