Consider the following options available to a mortgage borrower:
|
Loan Amount |
Interest Rate |
Type of Mortgage |
Discount Point |
|
|
Option 1 |
$100,000 |
6.75% |
30 yr fixed |
none |
|
Option 2 |
$150,000 |
6.25% |
30 yr fixed |
1 |
|
Option 3 |
$125,000 |
6.0% |
30 yr fixed |
2 |
What is the effective annual rate for each option?