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When you purchased your house 4 years ago, you took out a $300,000, 30 year FRM loan at 7.5%. You also paid 2 points to
When you purchased your house 4 years ago, you took out a $300,000, 30 year FRM loan at 7.5%. You also paid 2 points to get this loan. Now you want to sell your house and buy another one. In order to do so, you must pay off the existing one. The loan came with 1% prepayment penalty. What has been your effective interest rate on this loan? (show work)
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