You would like to purchase your dream home, which costs $1.5M, with a 20% down payment and a 30-year mortgage. You have the option of purchasing 1 discount point (by prepaying 1% of your loan amount) to lower your mortgage rate by 0.25% from a benchmark rate of 3.25%. This translates to a reduction in monthly mortgage payments from $5,222.48 to $5,059.25. What is the payback period of purchasing 1 discount point? 74 months 92 months 7,352 months There is not enough information to determine the answer. O None of the above

You would like to purchase your dream home, which costs $1.5M, with a 20% down payment and a 30-year mortgage. You have the option of purchasing 1 discount point (by prepaying 1% of your loan amount) to lower your mortgage rate by 0.25% from a benchmark rate of 3.25%. This translates to a reduction in monthly mortgage payments from $5,222.48 to $5,059.25. What is the payback period of purchasing 1 discount point? 74 months 92 months 7,352 months There is not enough information to determine the answer. O None of the above

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 15P

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