Question: When purchasing a $210,000 house, a borrower is comparing two loan alternatives. The first is 85% at 9.75% for 15 years. The second is 90%

When purchasing a $210,000 house, a borrower is comparing two loan alternatives. The first is 85% at 9.75% for 15 years. The second is 90% at 10.5% for 15 years. If both loans requires monthly payment and will be held to maturity, what is the incremental cost of taking the second alternative? A. 21.76% B. 19.17% C. 16.42% D. 13.39%

Mr. Smith made a mortgage 5 years ago for $85,000 at 8.25% for 15 years. Rates have now risen to 10%. What is the market value of the mortgage now? A. 73,400 B. 69,320 C. 62,400 D. 61,544

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