FinancingInterest_and_payment_calculationsEASY
Lena Chen is buying a home for $350,000 and is making a 20% down payment. Her lender will charge 2 discount points on the loan amount. How much will Lena pay for the points at closing?
Correct Answer
C) $5,600
Step 1: Loan amount = $350,000 × 80% = $280,000. Step 2: Points cost = $280,000 × 2% = $5,600. Because points are calculated on the loan amount rather than the purchase price, Lena will pay $5,600.
Answer Options
A
$1,400B
$7,000C
$5,600D
$14,000Why This Is the Correct Answer
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Deep Analysis of This Financing Question
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Real World Application in Financing
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Related Topics & Key Terms
Key Terms:
discount_pointsloan_amountdown_paymentclosing_costs
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