Question

A building was sold for $115,000. Down payment in the amount of $15,000 was deposited in escrow, and the buyer obtained a new loan for the balance of the purchase price. The lender charged two discount points. What was the total amount charged to the buyer for points in this purchase?

Answer 1

$200

Step-by-step explanation:

Since the buyer only made a $15,000 down payment, the remaining amount was $100,000.

The buyer's loan had to cover the remaining $100,000, and if the lender charged two discount points on the loan, it means that they charged 2% of the loan.

2% x $100,000 = $2,000.