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 the homeowner keeps the mortgage for 30 years, what is the net present value of paying the points?

. $8629.386

Explanation:

P = 250,000

r = 6%

r with point = 5.5%

Points = 2.25%

N = 30years × 12 = 360months

1. Paying the points (Loan)= p × point

=$250,000 x .2.25 / 100 = $5,625 (CF0)

Payments with 6% loan

I = p/ (1 + r)^n

= $250000 / (1 + 0.06)^360

= $1940.11

Payments with 5.5% loan

I = p/ (1 + r)^n

= $250,000/ ( 1 + 0.055)^360

= $1064.276

Savings = $1940.11 - $1064.276

= $875.834

Net present value of paying the points.

= $5625 + $1940.11 + $1064.276

= $8629.386

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hi,

henry is an economist and wants to understand the relationship between inflation and consumer spending habits. for his research, he needs the consumer price index for 2014 and the inflation rate. based on the prices of goods given, what will he find to be the cpi and inflation rate for 2014? assume that a consumer’s basket for three consecutive years consists of the following:

you dont privide answer choices.

answer - 15% of a inflatation rate is 15% less in cpi