Question
A homeowner can obtain a $250,000, 30-year fixed-rate mortgage at a rate of 6.0 percent with zero points or at a rate of 5.5 percent
A homeowner can obtain a $250,000, 30-year fixed-rate mortgage at a rate of 6.0 percent with zero points or at a rate of 5.5 percent with 2.25 points. If you will keep the mortgage for 30 years, what is the net present value of paying the points (to the nearest dollar)?
A. $9,475 B. $8,360 C. $7,564 D. $7,222
E. $6,578
loan 1: pmt: 1498.88, loan 2: pmt: 1419.49, saving in pmt: 79.4038, pv: 13985, points 2.25 = 5625
how to get NPV of paying points? using BAII Plus
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Financial Markets And Institutions
Authors: Anthony Saunders, Marcia Cornett
5th Edition
0078034663, 978-0078034664
