Question

lucy is financing 370,000 to purchase a house. how much money will she save over the life of a 30 year fixed rate lone by buying 3 points with a rate of 6.175% instead of not buying points with a rate of 6.55%?

Answer 1

@jim_thompson5910

Answer 2

are you allowed to use a calculator here?

Answer 3

yes @jim_thompson5910

Answer 4

what kind of calculator do you have?

Answer 5

im using the online scientific calulator @jim_thompson5910

Answer 6

which one?

Answer 7

on google @jim_thompson5910

Answer 8

can you provide the link?

Answer 9

http://web2.0calc.com/ @jim_thompson5910

Answer 10

are you allowed to use financial calculators?

Answer 11

yes do u kno of any @jim_thompson5910 ?

Answer 12

let me find you one

Answer 13

ok thanks @jim_thompson5910

Answer 14

how about this calculator

http://www.bankrate.com/calculators/mortgages/mortgage-calculator.aspx

have you seen it before?

Answer 15

how will i fill in that with this problem? @jim_thompson5910

Answer 16

370,000 is the amount loaned

the time in years is always 30 in this problem

the interest rate is the only thing changing

Answer 17

hopefully that makes sense?

Answer 18

still stuck what about the points @jim_thompson5910

Answer 19

don't worry about the points. Just focus on the interest rates for now

Answer 20

i would say 3264.84 what would u say @jim_thompson5910

Answer 21

let me try

Answer 22

what did you type in to get that?

Answer 23

that was one of the answer choices my friend came up with she said its either that or 32,648.40 @jim_thompson5910 she wasnt sure tho

Answer 24

can you show me what the calculator is saying?

Answer 25

i didnt know what to put in the downpayment so i left that blank and in the interest rate i put 6.175 and it gave me 1,526.31 and with the 6.55% it gave me 1,588.40 @jim_thompson5910

Answer 26

make the downpayment 0

Answer 27

even the percent @jim_thompson5910

Answer 28

one moment

Answer 29

are you able to see the total cost of the mortgage?

Answer 30

no @jim_thompson5910

Answer 31

ok I'm going to need to find another calculator for you

Answer 32

actually, no we just need the monthly payment. What monthly payment did you get for the 6.55% interest option?

Answer 33

1,588.40 @jim_thompson5910

Answer 34

that's too low

Answer 35

thats what i got when i entered it in the spaces @jim_thompson5910

Answer 36

try this one

http://www.bankrate.com/calculators/mortgages/loan-calculator.aspx

that other calc seems to have issues

Answer 37

this is what I get when I use that link

Answer 38

what about the loan date @jim_thompson5910

Answer 39

2,350.83 @jim_thompson5910

Answer 40

ignore that portion of the loan date

Answer 41

2,350.83 per month for 360 months = how much total?

Answer 42

will i do 2350.83 *360 ? @jim_thompson5910

Answer 43

yes and that's equal to what?

Answer 44

846298.8 @jim_thompson5910

Answer 45

yes, so that's the total cost for the 6.55% interest rate option

what is the total cost for the 6.175% interest rate option?

Answer 46

2260.14 @jim_thompson5910

Answer 47

one moment. Computer is being slow

Answer 48

ok that's your monthly payment

2260.14 per month for 360 months = what value?

Answer 49

813650.4 @jim_thompson5910

Answer 50

how much do the 3 points cost? any idea?

Answer 51

@jim_thompson5910 no

Answer 52

do you remember how to calculate the cost of 1 single point?

hint: it's a percentage of the amount loaned to you (look at your previous thread)