Given the Following Information, Calculate the Effective Borrowing Cost (EBC)

Multiple Choice

Given the following information, calculate the Effective Borrowing Cost (EBC) . Loan amount: $175,000, Term: 30 years, Interest rate: 7 %, Payment: $1,164.28, Discount points: 1 point, Origination fee: $3,250. Assume the loan is held until the end of year 10.

A) 0.6%
B) 3.8%
C) 7.0%
D) 7.4%