Please Help!
Lucy is financing $370,000 to purchase a house. How much money will she save over the life of a
30-year, fixed-rate loan by buying 3 points with a rate of 6.175% instead of not buying points with a rate of 6.55%?

$21,548.40

$14,364.84

$3,264.84

$32,648.40

Question

Please Help!
 Lucy is financing $370,000 to purchase a house. How much money will she save over the life of a
30-year, fixed-rate loan by buying 3 points with a rate of 6.175% instead of not buying points with a rate of 6.55%?

$21,548.40

$14,364.84

$3,264.84

$32,648.40

whpalmer4 · Answer

Figure out the monthly payment for each loan.  Sum up 30 years of such payments (360 months).  To the loan with points, add 3% of 370000.  Find the difference between the two totals.