Question

4. Hamed purchased pointsEach point lowered his APR by y%. The cost per point was z% of the loan amount. His new APR A% and his points cost him B dollars Write an algebraic expression for the original APR

Answer 1

The algebraic expression for the original APR is A% + y×B/(Initial Loan Amount)

Step-by-step explanation:

Mortgage points are charges paid to the lender directly to obtain a lower interest rate amount for a loan borrowed. Basically, it entails up front payment of interest that allows for a determination of a new reduced interest rate.

Here we have new APR = A%

Original APR = O%

% reduction of APR per point = y%

Cost of points = B dollars

Therefore, the original APR was A% + y×B/(Loan Amount)

Hence the algebraic expression for the original APR is therefore;

Original APR = A% + y×B/(Loan Amount).

Answer 2

The algebraic expression for the original APR is A% + y×B/(Initial Loan Amount)

Explanation:

Mortgage points are charges paid to the lender directly to obtain a lower interest rate amount for a loan borrowed. Basically, it entails up front payment of interest that allows for a determination of a new reduced interest rate.

Here we have new APR = A%

Original APR = O%

% reduction of APR per point = y%

Cost of points = B dollars

Therefore, the original APR was A% + y×B/(Loan Amount)

Hence the algebraic expression for the original APR is therefore;

Original APR = A% + y×B/(Loan Amount).