Examine the points versus no points chart to respond to the following query:Determine the percentage that the total interest paid will drop from buying no points to three points. To the closest hundredth, round the final response. Loan TermsExample 1 (No Points) Example 2 (Three Points)$484,500.00Loan Principal (after down payment) $484,500.00APR: fixedDiscount PointsMonthly PaymentTotal Interest from Monthly Payment5.0%No points$2,601.00$451,860.004.25%3 points = $14,535.00$2,383.00$373,380.00

Points are amount paid as a percentage of the loan amount and these are paid to reduce the interest…

Principal (after down payment) $484,500.00 APR: fixed Discount Points Monthly Payment 5.0% No points $2,601.00 Interest from Monthly Raymont $451 960.00 $484,500.00 4.25% 3 points = $14,53 $2,383.00 $272 290 00

Principal (after down payment) $484,500.00 APR: fixed Discount Points Monthly Payment 5.0% No points $2,601.00 Interest from Monthly Raymont $451 960.00 $484,500.00 4.25% 3 points = $14,53 $2,383.00 $272 290 00

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Question

Examine the points versus no points chart to respond to the following query:

Determine the percentage that the total interest paid will drop from buying no points to three points. To the closest hundredth, round the final response.

Loan Terms
Example 1 (No Points) Example 2 (Three Points)
$484,500.00
Loan Principal (after down payment) $484,500.00
APR: fixed
Discount Points
Monthly Payment
Total Interest from Monthly Payment
5.0%
No points
$2,601.00
$451,860.00
4.25%
3 points = $14,535.00
$2,383.00
$373,380.00

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