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A borrower has secured a 30 year, $200,000 loan at 8% with monthly payments. Fifteen years later, the borrower has the opportunity to refinance with
A borrower has secured a 30 year, $200,000 loan at 8% with monthly payments. Fifteen years later, the borrower has the opportunity to refinance with a fifteen year mortgage at 7.25%, However, the up front fees, which will be paid in cash, are $2,500. What is the return (annual rate) on investment if the borrower expects to remain in the home for the next fieen years?
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