If You Will Keep the Mortgage for 30 Years, What

If you will keep the mortgage for 30 years, what is the net present value of paying the points (to the nearest dollar) ?

A) $9,475
B) $8,360
C) $7,564
D) $7,222
E) $6,578 No Points: Pmt = $250,000/PVIFA (0.06/12, 360 months) ; Pmt = 1,498.88; Pay Points: Pmt = $250,000/PVIFA (0.055/12, 360 months) ; Pmt = 1,419.47; Pmt savings = 1,498.88 - 1,419.47 = 79.40; NPV of points: [79.40 *PVIFA (0.055/12, 360 months) ] - (0.0225 *250,000) = 8,360