What is the after tax effective cost of funds for a 37 percent tax bracket borrower for a $100,000 loan at 5 percent interest, with monthly payments amortized over 25 years if the lender charges 2 points at origination and the borrower will incur $2,700 in third party loan costs? Assume the loan is outstanding for the full loan term which is ten years.

a.5.69%

b. 3.59%

c. 5.00%

d. 7.00%