Incorrect 5.8%

You are considering the following fixed interest rate mortgage loan alternatives: Alternative 1: - $180,000 initial loan balance - 4.00% annual nominal interest rate - 30-year amortization schedule - \$859.35 monthly loan payment Alternative 2: - \$195,000 initial loan balance - 4.25% annual nominal interest rate - 30-year amortization schedule - $959.28 What is incremental cost of borrowing the additional $15,000 ? 0.58% 4.25% 5.8% 7.01%