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"A mortgage lender agrees to lend 80% of the purchaser price for four points. If the purchase price of the property is $165,000, how much will the lender receive for the discount?

a. $3,300
b. $6,600
c. $5,280
d. $8,250"

User Arvere
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1 Answer

1 vote

Final answer:

To find out the discount amount for a mortgage lender lending 80% of a property's purchase price at four points, calculate 80% of the purchase price and then 4% of that loan amount. The lender will receive $5,280 as the discount for the $165,000 property priced mortgage.

Step-by-step explanation:

The question asks how much a mortgage lender will receive for the discount given that the lender agrees to lend 80% of the purchase price for four points. To solve this problem, we first need to calculate 80% of the property's purchase price and then determine what four points on that mortgage amount would be.

First, we find 80% of $165,000, which is $132,000. This is the amount the lender agrees to lend. One point is equivalent to 1% of the loan amount, so four points would be 4% of $132,000.

Calculating 4% of $132,000:

0.04 × $132,000 = $5,280.

Therefore, the lender will receive $5,280 for the discount. The correct answer is c. $5,280.

User Kilrizzy
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