Mr Fisher Has Built Several Houses and Is Offering Buyers

question 12

Multiple Choice

Mr. Fisher has built several houses and is offering buyers mortgage rates of 10% with 15 year term. Current rates are 10.75%. Fourth National Bank will provide the loans, if Mr. Fisher pays an equivalent amount up front to buy down the interest rate. If a house is sold for $290,000 with a 90% loan, how much would Mr. Fisher have to pay to buy down the loan?

• A) $1,957.50
• B) $11,989.34
• C) $11,250.25
• D) $10,790.41

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Definitions:

Bargaining Power

The ability of a party to exert influence over another party in negotiations to achieve desirable terms.

Collective Bargaining

The practice of negotiating terms of employment, including wages and working conditions, between an employer and a group of workers or their representatives.

Rank And File

The ordinary members of an organization or the workforce, in contrast to its leaders or managers.

Bargaining Environment

The context or setting in which negotiation and discussions between employers and employees or their representatives occur, influenced by economic, legal, and social factors.