A mortgage loan having a face value of \\( \\$ 265,000 \\) is arranged by a mortgage broker. From this face value, the broker deducted a fee of \\( \\$ 4,000 \\). The mortgage is written at a contract rate of \\( 3.2 \\% \\) compounded semiannually for a twenty-five year term, with monthly payments. What is the annual cost of borrowing, including the brokerage fee, expressed as an effective interest rate? \\( 3.00 \\% \\) \\( 3.37 \\% \\) \\( 3.73 \\% \\) \\( 4.15 \\% \\) \\( 4.09 \\% \\)
A mortgage loan having a face value of \\( \\$ 265,000 \\) is arranged by a mortgage broker. From this face value, the broker deducted a fee of \\( \\$ 4,000 \\). The mortgage is written at a contract rate of \\( 3.2 \\% \\) compounded semiannually for a twenty-five year term, with monthly payments. What is the annual cost of borrowing, including the brokerage fee, expressed as an effective interest rate? \\( 3.00 \\% \\) \\( 3.37 \\% \\) \\( 3.73 \\% \\) \\( 4.15 \\% \\) \\( 4.09 \\% \\)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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A mortgage loan having a face value of \\( \\$ 265,000 \\) is arranged by a mortgage broker. From this face value, the broker deducted a fee of \\( \\$ 4,000 \\). The mortgage is written at a contract rate of \\( 3.2 \\% \\) compounded semiannually for a twenty-five year term, with monthly payments. What is the annual cost of borrowing, including the brokerage fee, expressed as an effective interest rate? \\( 3.00 \\% \\) \\( 3.37 \\% \\) \\( 3.73 \\% \\) \\( 4.15 \\% \\) \\( 4.09 \\% \\)
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