A developer borrows $5,500,000 over 30 years but expects 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?  How do you calculate the prepayment penalty?