Discount points of 3.06% are required to boost the yield on a loan with a 12% interest rate and 360 payment of $514.30 a month to 12.42%.
A dollar amount or a % deducted from an item's typical selling price is referred to as a discount. Make sure that need all of the items you plan to get before waiting after the holiday to make a purchase.
A value obtained in the future is replaced by an equivalent benefits created right away through the process of discounting. Discounting determines this relative value, so a dollar received in 50 years may be actually quite low received today.
Present value of loan=PV(12%/12,12*30,514.3)
=50000
PV(12.42%/12.12*30,514.3)
=48470
Discount=50000 - 48470
=1530
So discount points=1530/50000
Discount points =3.06%
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