Question

Please help :)

Answer 1

Estella is deciding between two loans.


Loan A Loan B
$207,000
20-year fixed
7.85%
0 discount points
M=$1712.16 $207,000
20-year fixed
7.65%
2 discount points
M=$1686.62


She has calculated all of the associated fees as well as any other expenses. She has $5,500 available to purchase the points, and plans to stay in the house for half the length of the loan.

Which statement represents the best financial decision?

Answer 2

from $207,000 its the loan B

Answer 3

Estella should purchase the discount points because she has enough available cash.

Estella should not purchase the discount points because she does not have enough available cash.

Estella should purchase the discount points because she will be in the house long enough to justify the purchase.

Estella should not purchase the discount points because she will not be in the house long enough to justify the purchase.

Answer 4

@jim_thompson5910

Answer 5

the table of the loan information is a bit jumbled

Answer 6

i can get you a better pic

Answer 7

ok thx

Answer 8

let me know if it works

Answer 9

i see it, but I can't help you since this is an exam

Answer 10

that's something you should solely do on your own

Answer 11

Loan A $207,000
20-year fixed
7.85%
0 discount points
M=$1712.16

Loan B
$207,000
20-year fixed
7.65%
2 discount points
M=$1686.62

Answer 12

I'll give you a hint though

calculate how much you'll pay over 10 years for each loan and see which loan is the better option (also consider if she can afford the discount points given the amount of cash on hand)