A borrower is purchasing a property for $250,000 and can choose between two possible loan...
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A borrower is purchasing a property for $250,000 and can choose between two possible loan alternatives. The first is a 80% loan for 25 years at 5% interest and 1 point and the second is a 90% loan for 25 years at 5.25% interest and 1 point. Assuming the loan will be held to maturity, what is the incremental cost of borrowing the extra money?
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