Respuesta :
The time taken to break even at buying 1 point will be in 9 years.
Given,
- Monthly mortgage payment =$958
- Monthly payment will be reduced to buy 1 point =$948.75
- Cost of each point =$1,000
Computation:
1. The computation of the reduced amount in the monthly mortgage payment:
[tex]\begin{aligned}\text{Reduced Amount}&=\text{Original Payment}-\text{Reduced Payment}\\&=\$958-\$948.75\\&=\$9.25\end{aligned}[/tex]
2. The computation of yearly mortgage payment:
[tex]\begin{aligned}\text{Yearly Mortgage Payment}&=\text{Reduced Amount}\times\text{Total Months in a Year}\\&=\$9.25\times12\\&=\$111\end{aligned}[/tex]
3. The computation of the number of years for the break-even by buying 1 point:
[tex]\begin{aligned}\text{Number of Years}&=\dfrac{\text{Cost of Point}}{\text{Amount og Yearly Mortgage Payment}}\\&=\dfrac{\$1,000}{\$111}\\&=9.00\;\text{Years}\end{aligned}[/tex]
Therefore, to break even by buying 1 point the holder requires 9 years to reach.
To know more about mortgage payments, refer to the link:
https://brainly.com/question/1542555
