A borrower bought a house for $200000, he can obtain an 80% loan with a 30 year fully amortizing, 7% interest and monthly payment. Alternatively he could get a 90% loan at 8.5% with same term. What is the incremental cost of borrowing the additional fund? Assume he will hold the loan for 30 years.

ANSWER CHOICES 23.35% 20.18% 19.11% 26.42%

berbahat he can obtain BON loan win 30-year hally amortis. Interest rate and monthly payment. Alternatively, he could wet or loan. What the matcast ar Bromwww the Assume he will hold the loan for 30 years