A Borrower Is Purchasing a Property for $180,000 and Can

question 35

Multiple Choice

A borrower is purchasing a property for $180,000 and can choose between two possible loan alternatives.The first is a 90% loan for 25 years at 9% interest and 1 point and the second is a 95% loan for 25 years at 9.25% interest and 1 point.Assuming the loan will be repaid in 5 years,what is the incremental cost of borrowing the extra money?

• A)13.95%
• B)13.67%
• C)14.42%
• D)12.39%

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Definitions:

Bystander Intervention

The act of stepping in to assist someone in need when others are present, which can be influenced by factors like social norms and the perceived cost of intervention.

Darley and Latané

Researchers known for their pioneering work in the field of social psychology, especially in the areas of bystander intervention and social influence.

Drowning

A fatal process resulting from submersion in liquid, leading to respiratory impairment and lack of oxygen.

Helping Behavior

Actions intended to provide assistance or benefit to others without expectation of reward or recognition.