Arizona Real Estate License Practice Exam 2025 – All-in-One Resource to Pass with Confidence!

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Question: 1 / 1505

How much will John be required to pay for the 2 discount points on a loan of $87,900?

$1,758

To determine how much John will be required to pay for 2 discount points on a loan of $87,900, it's important to understand that discount points are a form of prepaid interest. Each point typically equals 1% of the total loan amount.

In John’s case, 2 discount points would represent 2% of the loan amount. To calculate the total cost for the discount points:

1. Calculate 2% of the loan amount:

- First, find 1% of $87,900, which is $879.

- Then, multiply this amount by 2 to find the cost of 2 discount points:

- $879 x 2 = $1,758.

Thus, the total amount John will pay for 2 discount points is $1,758. This calculation aligns with the principles of the real estate finance practice regarding how discount points work, making this the correct answer.

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$1,845

$4,395

$6,300

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