3. Your cousin Michael is purchasing a home in a new subdivision. The purchase price...
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3. Your cousin Michael is purchasing a home in a new subdivision. The purchase price of the home is $225,000, and he is taking out a $170,000 mortgage at 7% interest amortized over 25 years. One of the require- ments of the mortgage is that he pay 3-discount points and a 1% origination fee to the lender in order to get the loan. What annual percent- age rate (rounded to two decimal places) is Michael paying on the loan if it is expected to run the full 25 years? (Use your financial calculator.)
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