Todd is applying for a $100,000 mortgage.He can get a $600 monthly payment for principal and interest and no points,or $520 monthly payment with 2 points.How many months will it take Todd to cover the cost of discount points if he takes the lower monthly payment?

a)6
b)10
c)18
d)25
IS C CORRECT ANSWER?THANK YOU:))))

No.

2,000 / 80 = ?

To determine the number of months it will take Todd to cover the cost of discount points, we need to calculate the cost of the discount points and then divide it by the savings per month.

First, let's calculate the cost of the discount points. In this case, Todd is paying 2 points on a $100,000 mortgage. Each point is equal to 1% of the loan amount. Therefore, 2 points on a $100,000 mortgage would be 2% of $100,000, which is $2,000.

Next, we need to calculate the monthly savings by choosing the option with the lower monthly payment. The lower monthly payment is $520.

To find the number of months it will take to cover the cost of the discount points, we divide the cost of the discount points ($2,000) by the monthly savings ($520).

$2,000 / $520 = 3.846

Since we're dealing with payments and not partial months, we need to round up to the nearest whole month. Therefore, it will take Todd approximately 4 months to cover the cost of the discount points.

Now, let's check if option C) is the correct answer. If Todd were to pay the lower monthly payment of $520, over 4 months, he would have covered the $2,000 cost of the discount points.

To verify:

$520 x 4 months = $2,080

As we can see, he would have paid $2,080 over these 4 months, which is more than the $2,000 cost of the discount points.

So, option C) is incorrect. The correct answer should be option D) 25, as it would take Todd approximately 25 months to cover the cost of the discount points.