Problem:
A homeowner can obtain a $250,000, 30-year fixed-rate mortgage at a rate of 6.0 percent with zero points or at a rate of 5.5 percent with 2.25 points.
Required:
Question: If you will keep the mortgage for 30 years, what is the net present value of paying the points (to the nearest dollar)?
Note: Please provide reasons to support your answer.