Larry Mager purchased a ski lodge in Telluride for $850,000. His bank is willing to finance 70% of the purchase price. As part of the mortgage closing costs, Larry had to pay 4(1/4) discount points. How much did this amount to?
To find out how much Larry had to pay for the discount points, we need to calculate 4(1/4) percent of the purchase price.
Step 1: Calculate 1% of the purchase price:
1% of $850,000 = $8,500
Step 2: Calculate 4(1/4)% of the purchase price:
Since 1% of $850,000 is $8,500, 4(1/4)% of the purchase price is 4 times $8,500, which equals $34,000.
Therefore, Larry had to pay $34,000 for the discount points.