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A borrower needs $300,000 in cash to purchase a residential property. The lender offers this borrower a 30 year FRM at 4% with 3 points. The lender also alternatively offers the borrower a 30 year FRM loan for $300,000 an no points with a rate of 4.75%? If the borrower plans to hold the loan until maturity, what is the difference in effective interest rates between the two loans?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92296203

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