Question: A borrower is purchasing a property for $ 3 0 0 , 0 0 0 and can choose between two possible loan alternatives. The first

A borrower is purchasing a property for $300,000 and can choose between two possible loan alternatives. The first is an 80% loan for 25 years at 6.75% interest and one discount point and the second is a 90% loan for 25 years at 7.00% interest and one discount point. Assuming the loan will be held to maturity, what is the incremental cost of borrowing the extra money?

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