Real Estate Math

A buyer puts 20% down on a $400,000 home. The lender charges 2 points at closing. How much are the points in dollars?

A$6,400✓ Correct
B$8,000
C$1,600
D$3,200

Explanation

Loan amount = $400,000 × 80% = $320,000. Points are charged on the loan amount. 2 points = 2% × $320,000 = $6,400.

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