WHICH SCENARIO HAS THE HIGHEST EFFECTIVE BORROWING COST?

$1.$ NOT ENOUGH INFORMATION

$2.$ OPTION B

Questions $20-21$ are based on the following information

Suppose that there is no origination cost. Given the following information,

Option A:

Term: $30$ years; Interest Rate: $5\%$; Discount Points: $0$:

Homeowner will move in $2$ years

Option B:

Term: $30$ years; Interest Rate: $5\%$; Discount Points: $1$;

Homeowner will stay in the house for over $30$ years

Option C:

Term: $30$ years; Interest Rate: $5\mathrm{.}05\%$

Discount Points: $0$; Homeowner will stay in the house for over $30$

years