Problema homeowner can obtain a 250000 30-year fixed-rate, Ask an Expert

Accounting

Problem:

A homeowner can obtain a $250,000, 30-year fixed-rate mortgage at a rate of 6.0% with zero points or at a rate of 5.5% with 2.25 points.

Required:

Question: If you will keep the mortgage for 30 years, what is the net present value of paying the points (to the nearest dollar)?

Note: Please show how to work it out.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91170343

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