FinancingInterest_and_payment_calculationsMEDIUM
A lender quotes 1.25 discount points on a $320,000 loan. What is the dollar cost of those points?
Correct Answer
D) $4,000
Step 1: Convert 1.25 points to 1.25% or 0.0125. Step 2: $320,000 × 0.0125 = $4,000. So the borrower would pay $4,000 for 1.25 points.
Answer Options
A
$3,200B
$40,000C
$4,800D
$4,000Why This Is the Correct Answer
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Related Topics & Key Terms
Key Terms:
discount_pointsloan_feespercentage_mathmortgage_costs
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