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Bob, a homeowner, can obtain a $350,000, 30-year, fixed-rate mortgage loan at a rate of 4.5% with zero points or at a rate of 4.4%
Bob, a homeowner, can obtain a $350,000, 30-year, fixed-rate mortgage loan at a rate of 4.5% with zero points or at a rate of 4.4% with 1 point or a rate of 4.35% with 2 points.
a. (2 pts.) Assume Bob plans will keep the mortgage for 30 years, which option should he choose? b. (2 pts.) At a minimum, how long must Bob own the house to make it worthwhile to pay the points?
Show work and round to three decimal places, thank you!!
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