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A borrower bought a house for $300,000: he can obtain an 80% loan with a 30-year fully amortizing. 7% interest rate and monthly payment. Alternatively,

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A borrower bought a house for $300,000: he can obtain an 80% loan with a 30-year fully amortizing. 7% interest rate and monthly payment. Alternatively, he could get a 30-year fully amortizing 90% loan at 9%. What is the incremental cost of borrowing the additional fund? Assume the borrower will hold the loan for 10 years. 28.21% 23.50% 30.30% 25.85%

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