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

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) 7.00%
C) 13.00%
D) 22.62%
E) 28.89%