A borrower has secured a 30 year, $150,000 loan at 7% with monthly payments. Fifteen years later, the borrower has the opportunity to refinance with a fifteen year mortgage at 6%. However, the up front fees, which will be paid in cash, are $2,500. What is the return on investment if the borrower expects to remain in the home for the next fifteen years? (Anwser: E)

A:6.00%

B:7.00%

C:13.00%

D:22.62%

E:28.89%

How to solve this problem?