Question 57

6 discount points have to be paid.

To determine the number of discount points that correspond to the $4,800 payment on an $80,000 mortgage, it is necessary to calculate the percentage represented by the discount points. Each discount point typically equals 1% of the loan amount.

A) 3

This option suggests that 3 discount points are paid. However, calculating 3 points on an $80,000 loan would yield $2,400 (3% of $80,000), which is less than the $4,800 paid. Therefore, this option is incorrect.

B) 4

Choosing 4 discount points implies a payment of $3,200 (4% of $80,000). While this is a significant amount, it still does not meet the $4,800 requirement. Thus, this option is also incorrect.

C) 5

If 5 discount points were paid, the total would amount to $4,000 (5% of $80,000). Although closer to the required payment, it still falls short of the $4,800 that the borrower has to pay. Consequently, this option is incorrect as well.

D) 6

This option accurately reflects the situation, as 6 discount points would correspond to a payment of $4,800 (6% of $80,000). This calculation confirms that the borrower must pay 6 discount points, making this option correct.

Conclusion

The calculation for discount points shows that 6 points are required to match the $4,800 payment on an $80,000 mortgage. The other options do not reach the necessary payment amount, confirming that they are incorrect. Therefore, option D is definitively the right choice.