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What is the annual effective cost of this loan

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Question - You bought a house with a 30-year mortgage with loan size $200,000 and interest rate 5%. Assuming the total transaction cost is $5,000 and your marginal income tax rate is 25%. What is the annual effective cost of this loan after-tax if your loan will be outstanding for 1 month?

a. 34.62%

b. 48.62%

c. 39.12%

d. 43.62%

Reference no: EM132786720

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