A Mortgage broker offers you a mortgage after netting the down-payment of $225,000.00 for a 15-year mortgage. He notifies you that your credit-report results in a rate of interest (APR) of 7.00%, however he offers you the ability to pay 4 points into the mortgage to reduce the rate of interest. Each Mortgage Point represents 1% of the mortgage balance, which you pay upfront, and every 1.5 points will earn you approximately 0.25% reduction in interest rate on the mortgage. He also comments that there is, of course, his origination fee of $1,150.00. To determine whether or not you should pay the points--compute the true adjusted APY of the mortgage.

a. 6.52%

b. 7.04%

c. 5.61%

d. 0.59%