Question: A borrower has a 30 year fully amortizing FRM, with a $300,000 balance, 4.5% rate. There is a 2% prepayment penalty on this loan if it is repaid before 5 years. After 3 years of holding this loan, market interest rates have dropped and the borrower is considering a refinance. A 27 year fully amortizing FRM is available with a 3.5% rate and $2,000 in origination fees. The borrower plans to pay all of the fees associated with repaying the old loan and originating hte new loan upfront in cash. If the borrower plans to hold the new loan until maturity, what is the internal rate of return on this loan? (Round to 2 decimal places; if your answer is ten and half percent, enter 10.50.)