Use estimation to select the best response. Do not calculate. A $147,000 30-year loan at 10% + 0.5 point + $200 would have total fees of about __________.
A) $15,000
B) $1,300
C) $750
D) $950
E) $18,000

Question

Quizplus · Accepted Answer

Estimating the fees for a $147,000 loan at 10% yields an interest payment of approximately $14,700 per year. Over 30 years, this would amount to $441,000. Adding 0.5 points to this (0.5% of the loan amount) would be $735, and adding a $200 fee would bring the total fees to around $950. Therefore, the best choice is D.

Use Estimation to Select the Best Response