Question: Suppose instead that the borrower must pay 1.5 points and $500 in miscellaneous fees in association with this loan. What is the borrowers EBC assuming

  1. Suppose instead that the borrower must pay 1.5 points and $500 in miscellaneous fees in association with this loan.
    1. What is the borrowers EBC assuming a 30-year holding period?
    2. What is the borrowers EBC with a 10-year expected holding period?
    3. Explain briefly why the EBC is higher in part b than it is in part a.
    4. What is the APR on this loan if the borrowers expected holding period is 30 years?
    5. What is the loans APR if the borrower expects to hold the loan only 10 years?

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