A Borrower Has Secured a 30 Year,$150,000 Loan at 7

question 30

Multiple Choice

A borrower has secured a 30 year,$150,000 loan at 7% with monthly payments.Fifteen years later,the borrower has the opportunity to refinance with a fifteen year mortgage at 6%.However,the up front fees,which will be paid in cash,are $2,500.What is the return on investment if the borrower expects to remain in the home for the next fifteen years?

• A)6.00%
• B)13.00%
• C)22.62%
• D)28.89%

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Definitions:

Accommodation

The process by which the eye's lens changes shape to focus on near or distant objects, or in psychology, altering one's beliefs to make them compatible with reality.

Assimilation

A cognitive process where individuals integrate new information into existing knowledge structures or schemas.

Schema

A cognitive framework or concept that helps organize and interpret information in the world around us.

Structure

The arrangement or organization of components within a system or the manner in which something is built or organized.