Frank and Carole have to decide between a 5% mortgage and a 4.25% mortgage with 1 pre-paid point. The loan value is $175,000 and fixed rate mortgages. What is the payback period for the lower priced mortgage? 18 months 22 months 48 months

Essentials Of Investments
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ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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Chapter1: Investments: Background And Issues
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Frank and Carole have to decide between a 5% mortgage and a 4.25% mortgage with 1 pre-paid point. The loan value is $175,000 and both are conventional 30-year
fixed rate mortgages. What is the payback period for the lower priced mortgage?
O 18 months
22 months
48 months
36 months
Transcribed Image Text:Frank and Carole have to decide between a 5% mortgage and a 4.25% mortgage with 1 pre-paid point. The loan value is $175,000 and both are conventional 30-year fixed rate mortgages. What is the payback period for the lower priced mortgage? O 18 months 22 months 48 months 36 months
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