Question: 14. A borrower is faced with choosing between two loans. Loan A is available for $75,000 at 10 percent interest for 30 years, with 6

14. A borrower is faced with choosing between two loans. Loan

14. A borrower is faced with choosing between two loans. Loan A is available for $75,000 at 10 percent interest for 30 years, with 6 points to be included in closing costs. Loan B would be made for the same amount, but for 11 percent for 30 years, with 2 points to be included in closing costs. Both loans are fully amortizing. a) If the loan is repaid after 15 years, which loan would be the better choice? b) If the loan is repaid after 5 years, which loan would be the better choice

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