Finance
A Kentucky buyer pays 2 discount points on a $200,000 loan at a 7% rate. Each point reduces the rate by 0.25%. How much do the points cost, and what is the new rate?
A$4,000; 6.5%✓ Correct
B$2,000; 6.5%
C$4,000; 6.75%
D$2,000; 6.75%
Explanation
Each discount point costs 1% of the loan amount. 2 points x $200,000 x 1% = $4,000.
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