What is the expected borrowing cost

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A developer borrows $5,500,000 expecting to sell the property in 3 years. Current ARM rates are 5% and are expected to rise to 6% in the second year and 6.5% in the third year. If there is a 2.5% prepayment penalty for repaying the loan in the first 5 years, what is the expected borrowing cost?

Reference no: EM132022771

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