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In: Finance

A house price of $235,000 can be financed with the two loans with monthly payments: Loan...

A house price of $235,000 can be financed with the two loans with monthly payments:

Loan Amount Term (years) Interest Rate
Loan 1 $ 180,000 30 5%
Loan 2 $ 20,000 30 7%

What is the annual cost if there are no costs associated with the two loans and the borrower will hold the loan for entire term?

5.21%

5.81%

6.21%

6.81%

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