Answer:
If Dominic buys 2 points (2% of the loan value) he will get a better rate and hence less payment. The question is asking how long will it take him to save the initial investment of 2% of the loan value due to a smaller payment. The monthly payment at 5.45% is $1,146.43, the monthly payment for 5.2% is $1,118.66. This is a difference of $27.77 per month. The 2 points will cost him $3,752.00. The question is asking how long will it take Dominic to re-coup his $3,752.00 if he saves $27.77 per month. Just divide the 2 numbers and you get 135.10 months. If you divide that by 12 you get 11.26 years, which is roughly 11 years, 4 months.
Step-by-step explanation:
Here is what the question is asking. If Dominic buys 2 points (2% of the loan value) he will get a better rate and hence less payment. The question is asking how long will it take him to save the initial investment of 2% of the loan value due to a smaller payment. The monthly payment at 5.45% is $1,146.43, the monthly payment for 5.2% is $1,118.66. This is a difference of $27.77 per month. The 2 points will cost him $3,752.00. The question is asking how long will it take Dominic to re-coup his $3,752.00 if he saves $27.77 per month. Just divide the 2 numbers and you get 135.10 months. If you divide that by 12 you get 11.26 years, which is roughly 11 years, 4 months.
Y=(-1/6)x+5
m=(y2-y1)/(x2-x1)
m=(3-6)/(12-(-6))
m=(-3)/(18)
m=-1/6
y=mx+b
y=(-1/6)x+b
6=(-1/6)(-6)+b
6=1+b
b=5
y=(-1/6)x+5
Okay, i don't want to give you the direct answer because i want you to know how to do it ... First you multuply $4.30 x .4 and you will get a number... remember that number in your head and subtract it from the original amount of $4.30... then once you get the number from subtracting the discount, multiply that number by .6..... then with that number, add the sales tax and there is your answer!
