Multiple Choice
Mr.Tramp made a mortgage 5 years ago for $85,000 at 8.25% interest and a 15 year term.Rates have now risen to 10% for an equivalent loan.Mr.Tramp's lender is willing to discount the loan by $2,000 if he will prepay the loan.What rate of return would Mr.Tramp receive by prepaying the loan?
A) 10.24%
B) 8.95%
C) 14.32%
D) 9.14%
Correct Answer:
Verified
Correct Answer:
Verified
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