Question $19$

$3\mathrm{.}3$ pts

A borrower bought a house for $$300,000$; he can obtain an $80\%$ loan with a $30-$year fully amortizing, $7\%$ interest rate and monthly payment. Alternatively, he could get a $30-$year fully amortizing $90\%$ loan at $9\%.$

What is the incremental cost of borrowing the additional fund? Assume the borrower will hold the loan for $10$ years.

$28\mathrm{.}21\%$

$30\mathrm{.}30\%$

$23\mathrm{.}50\%$

$25\mathrm{.}85\%$