The home that you want to purchase requires that you pay 2.5 points towards a $175,210 loan. Determine the cost of the home after the points have been applied.

One point is 1% of the loan, so 2.5 points cost 2.5% × $175,210 = $4,380.25. Add this cost to the loan amount: $175,210 + $4,380.25 = $179,590.25. The cost after applying the points is $179,590.25, choice A.

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