Many mortgage company allow youpo "buy down" your interest rate of your loan by buying poir A point is equal to 1% of your mortgage amount (or $1,000 for every $100,000). You're essential paying some interest up front in exchange for a lower interest rate over the life of your loan. Find the following payments and total cost (including points) of a $170,000.00 that is borrowed f B0 years with 1 6% compounded monthly with no points $ The total cost would be $ 6. 9% compounded monthly with 1 point $ The total cost would be $ 14

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
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Many mortgage company allow youto "buy down" your interest rate of your loan by buying points.
A point is equal to 1% of your mortgage amount (or $1,000 for every $100,000). You're essentially
paying some interest up front in exchange for a lower interest rate over the life of your loan.
Find the following payments and total cost (including points) of a $170,000.00 that is borrowed for
30 years with
a) 6, % compounded monthly with no points $
The total cost would be $
1
b) 6– % compounded monthly with 1 point $
4.
The total cost would be $
c) 6% compounded monthly with 2 points $
The total cost would be $
Transcribed Image Text:Many mortgage company allow youto "buy down" your interest rate of your loan by buying points. A point is equal to 1% of your mortgage amount (or $1,000 for every $100,000). You're essentially paying some interest up front in exchange for a lower interest rate over the life of your loan. Find the following payments and total cost (including points) of a $170,000.00 that is borrowed for 30 years with a) 6, % compounded monthly with no points $ The total cost would be $ 1 b) 6– % compounded monthly with 1 point $ 4. The total cost would be $ c) 6% compounded monthly with 2 points $ The total cost would be $
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