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Suppose that you have two loan choices with monthly payments Loan Amount. Terms. Rate $250,000 30 5% $220,000 30 4.5% What is the incremental borrowing

Suppose that you have two loan choices with monthly payments

Loan Amount. Terms. Rate

$250,000 30 5%

$220,000 30 4.5%

What is the incremental borrowing cost of $30,000 for loan 1 over loan 2 if you hold the loan for only 6 years (72 months) and there are no origination costs for the two loans?

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