FinancingInterest_and_payment_calculationsHARD
For disclosure purposes, a borrower signs a note for $240,000. At closing, the borrower pays 2 discount points and a $1,200 origination charge that are treated as prepaid finance charges. What is the amount financed?
Correct Answer
B) $234,000
Step 1: Two points on $240,000 = $4,800. Step 2: Total prepaid finance charges = $4,800 + $1,200 = $6,000. Step 3: Amount financed = $240,000 − $6,000 = $234,000. So the amount financed is $234,000.
Answer Options
A
$228,000B
$234,000C
$235,200D
$240,000Why This Is the Correct Answer
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Why the Other Options Are Wrong
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Deep Analysis of This Financing Question
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Background Knowledge for Financing
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Real World Application in Financing
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Common Mistakes to Avoid on Financing Questions
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Related Topics & Key Terms
Key Terms:
amount_financedprepaid_finance_chargesdiscount_pointsapr_disclosures
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