Finance
A Wyoming lender requires a borrower to pay 2 discount points on a $250,000 loan. What is the cost of the points?
A$2,500
B$5,000✓ Correct
C$10,000
D$25,000
Explanation
One point = 1% of the loan amount. 2 points = 2% of $250,000 = $250,000 x 0.02 = $5,000. Points are prepaid interest paid at closing to obtain a lower interest rate.
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