Question

6) Jesse is buying a home for $450,000 at 7.8% interest and Jesse is putting 30% down? He wishes to buy 3 points what is the cost of the points?

Answer 1

$9450

Explanation:

Given that:

The price of the home = $450000

The interest = 7.8%

Down payment = 30% of price of the home

i.e 0.3 × 450000 = 135000

The principal outstanding balance = 450000 - 135000

= 315000

Finally, the cost of 3 points will be;

`= 315000 * (3)/(100)`

= $9450