Todd Foley is applying for a $100,000 mortgage.He can select either a $595 monthly payment with no points or a $515 payment with two points.How many months will it take Todd to cover the cost of the discount points if he takes the lower monthly payment?
A)6
B)10
C)18
D)25
E)48

Question

Quizplus · Accepted Answer

The cost of two points on a $100,000 mortgage is $2,000 (2% of $100,000). The monthly savings with the lower payment is $80 ($595 - $515). To cover the $2,000 cost, it will take $2,000 / $80 = 25 months.

Todd Foley Is Applying for a $100,000 Mortgage