35. A property sold for $150,000. The loan-to-value ratio was 80% and there were 2 discount points charged. Which of the following was the cost of the discount points?
Answer: C
The cost of the discount points was $2,400.
The cost of the discount points is calculated based on the loan amount, which is determined by the loan-to-value ratio. With a property value of $150,000 and an 80% loan-to-value ratio, the loan amount is $120,000. Two discount points, which equal 2% of the loan amount, results in a cost of $2,400.
A) $600
This option represents 0.5% of the loan amount of $120,000. Since the calculation for two discount points (which is 2% of the loan amount) is incorrect, this option is not valid for the given question.
B) $1,500
This option is 1.25% of the loan amount of $120,000, which is also not accurate for the cost of two discount points. Therefore, this option does not reflect the correct calculation based on the provided information.
C) $2,400
This is the correct option. The loan amount at 80% of $150,000 is $120,000, and two discount points equal 2% of that amount, resulting in a cost of $2,400. This accurately reflects the calculation required for the question.
D) $3,000
This option represents 2.5% of the loan amount of $120,000. Since the cost of the discount points is based on 2% of the loan amount, this option is incorrect and does not align with the calculation needed for the question.
Conclusion
The correct answer is $2,400, as it accurately represents the cost of two discount points based on the loan amount derived from the loan-to-value ratio. All other options either miscalculate the percentage of the loan amount or fail to consider the correct total, confirming that they are not valid answers for this question.