Question

A "point" is 1% of your borrowed amount on a mortgage. You want to pay 2 points to get a 0.5% reduction in your interest rate on a $175,000 mortgage. How much will you pay in points?

Answer 1

Answer: a) $3,500

Explanation:

I got it right

Answer 2

a point is 1% of your borrowed amount on a mortgage.
mortgage loan = 175,000

175,000 x 1% = 1,750 per point

1750 x 2 = 3,500 is the amount paid for the 2 points.