Question: A. How much interest will you pay during the 14th year of a $350,000 house price, 30 year, 6.5% monthly compounded, 80 LTV loan? a.

A. How much interest will you pay during the 14th year of a $350,000 house price, 30 year, 6.5% monthly compounded, 80 LTV loan? a. $7755.94 b. $8379.86 c. $13,968.37 d. $14,627.41 e. None of the above 350,000 * .80 = 280,000 CUMIPMT (6.5%/12,30*12,280000,157,168,0)= $13,968.37

B. In order to obtain the loan in question A, you had to pay a 0.50% origination fee and 1.5 discount points. If the loan also came with $2,250 in third-party closing costs, what is the effective borrowing cost of this loan if you pay off the loan at the end of the 12th year? a. 6.87% b. 7.02% c. 7.54% d. 7.68% e. None of the above

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