Two loans have the same interest rate and maturity. Loan A has a 15-year amortization rate. Loan B has a 30-year amortization rate. In comparing these two loans from a borrowers perspective:

	The advantage of Loan B is lower monthly payments but its disadvantage is a higher balloon at maturity.
	The advantage of Loan A is lower monthly payments but its disadvantage is a higher balloon at maturity.
	The advantage of Loan A is lower monthly payments and lower balloon payment at maturity.
	The advantage of Loan B is lower monthly payments and lower balloon payment at maturity.

Consider a $4,000,000, 7%, 25-year mortgage with monthly payments and a 7-year maturity with balloon. If a lender wants a yield of 8% (MEY), how many disbursement discount points must the lender charge to achieve this yield?

	3 points
	4 points
	5 points
	1 point