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Suppose that you have the following two loans with monthly payments and no origination costs: Loan amount Term (years) Interest rate $90,000 15 7% $80,000

Suppose that you have the following two loans with monthly payments and no origination costs:

Loan amount Term (years) Interest rate

$90,000 15 7%

$80,000 20 6%

If you will prepay in 18 years (216 months), what is the incremental cost of $10,000 for loan 1?

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