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Question 19 A borrower bought a house for $300,000, he can obtain an 80% loan with a 30-year fully amortizing, 7% interest rate and monthly

Question 19 A borrower bought a house for $300,000, he can obtain an 80% loan with a 30-year fully amortizing, 7% interest rate and monthly payment. Alternatively, he could get a 30-year fully amortizing 90% loan at 9% What is the incremental cost of borrowing the additional fund? Assume the borrower will hold the loan for 10 years. 524213 30,30% 23.50% 25.85%

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