Try the fastest way to create flashcards
Question

# Determine the cost of the points and the new interest rate for each loan amount and interest rate. Assume each point costs 1% of the loan amount. \$400,000, original APR 4.1%, 1 point with a 0.2% discount.

Solution

Verified
Step 1
1 of 5

In this task, we have to determine the cost of the points and the new interest rate for each loan amount and interest rate. Let us first write what variables are given:

Loan amount $= \400,000$

Interest rate $= 4.1\%$

Points purchased $= 1$

Reduction per point purchased $= 0.2\%$

Cost per point $= 1\%$

## Recommended textbook solutions #### Financial Algebra

1st EditionISBN: 9780538449670 (1 more)Richard Sgroi, Robert Gerver
2,606 solutions #### Financial Algebra, Workbook

1st EditionISBN: 9780538449700Richard Sgroi, Robert Gerver
773 solutions #### Financial Algebra: Advanced Algebra with Financial Applications

2nd EditionISBN: 9781337271790Richard Sgroi, Robert Gerver
3,016 solutions #### Practice Problems for Financial Algebra: Advanced Algebra with Financial Applications

2nd EditionISBN: 9781337271820Robert Gerver
898 solutions