Michigan Real Estate Salesperson Practice Exam 2026 - Free Real Estate License Practice Questions and Study Guide

To determine the points being charged, it's important to understand what a "point" represents in real estate transactions. One point is equal to 1% of the total loan amount.

In this scenario, the loan amount is $120,000. If the bank charged 2 points, that would equate to 2% of the loan amount. To calculate the dollar amount of points at 2 points, you take 2% of $120,000, which equals $2,400.

Since the total charged for the points aligns with the calculation of 2 points (which affirms the dollar amount paid is exactly what would be expected for 2% of $120,000), this confirms that 2 is indeed the number of points charged.

Therefore, 2 points corresponds to the amount of $2,400 paid on a loan of $120,000, supporting the conclusion that the correct answer is 2. This demonstrates the direct relationship between the percentage charged in points and the total amount of the loan.