A lender estimates that the closing costs on a $293,600 home loan will be $11,010. The actual closing costs were 3.25% of the loan amount. Determine if the closing costs were higher or lower than the estimate and by what percent? a. higher by 0.25% b. higher by 0.5% c. lower by 0.25% d. lower by 0.5%

Question

Jeffery Dalton

Mathematics

24 July, 04:14

A lender estimates that the closing costs on a $293,600 home loan will be $11,010. The actual closing costs were 3.25% of the loan amount. Determine if the closing costs were higher or lower than the estimate and by what percent? a. higher by 0.25% b. higher by 0.5% c. lower by 0.25% d. lower by 0.5%

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Answers (2)

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Valeria Byrd · Answer 1

The actual closing costs must be

$293,600 (0.0325) = $9542

The difference of the actual and the estimate is

$11010 - $9542 = $1468

Then, we find the percentage of the difference from the whole:

1468/293600 * 100 = 0.5%

Hence, the actual closing costs was lower than the estimate by 0.5%. The answer is D.

Easton Webster · Answer 2

The answer to your question is D.