When calculating the Effective borrowing costs (EBC) where does .97 come from in the PV calculation? :

Mortgage Loan term: 30 years

Annual interest rate: 6 percent

Monthly payments

Up-front financing costs: $5,000

Discount points: 3

1. Mortgage Payment Payment (PMT): N=360 , I/Y= 6, P/Y= 12, PV= 200,000, FV=0, solve for PMT: $1,199.10

2. Find the Mortgage Effective Borrowing Cost: N= 360 (30 years), I/Y=?, P/Y=12, PV=189,000, PMT= -199.10, FV=0, solve for I/Y= 6.54% , EBC: 6.54%

PV= (200,000*0.97)-$5,000= $189,000

Can someone explain the PV calculation and where is 0.97 coming from? Thank you!