An investor is considering a loan based on the following assumptions to finance the purchase of an office building: - Loan amount: $1,000,000 - Interest Rate: 7 percent - Amortization period: 20 years - Loan term: 7 years - Payments per year: 12 - Lender discount points: 2 - Third party loan costs: $12,500 What is the effective cost of funds to the borrower? 9.00 percent 7.61 percent 8.42 percent 7.66 percent