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You have borrowed a 30y mortgage with an initial amount of $500,000. Since the initial interest rate was high, you purchased 3% discount points and
You have borrowed a 30y mortgage with an initial amount of $500,000. Since the initial interest rate was high, you purchased 3% discount points and received a 4% annual interest rate. What is your effective annual rate if you hold this loan for only seven years?
The answer is 4.53 but I do not know to get that answer.
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