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Suppose that you are contemplating borrowing $375,000 in the form of a 30-year loan with an annual interest rate of 2.25% with monthly payments and
Suppose that you are contemplating borrowing $375,000 in the form of a 30-year loan with an annual interest rate of 2.25% with monthly payments and monthly compounding. In order to get the loan you will need to pay a 1% origination fee, 2 discount points, and $2,750 in third-party closing costs. What will the annual effective borrowing costs be for this loan if you make all 360 payments?
A. 2.25%
B. 2.37%
C. 2.45%
D. 2.54%
E. 2.63%
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