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Find the effective borrowing cost of the following loan: Term 30 years Payments per year 12 Loan amount $11,400,000 Contract rate 5.0% Loan points 1.2%

Find the effective borrowing cost of the following loan:

Term 30 years

Payments per year 12

Loan amount $11,400,000

Contract rate 5.0%

Loan points 1.2%

Loan expenses $40,000

Expected prepayment 5 years

Prepayment penalty 0.5% of outstanding balance on prepay date

Group of answer choices

7.115%

5.452%

5.335%

5.200%

5.368%

5.444%

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