A building was purchased for $350,000 with a 20% down payment. If the lender charged the buyer three discount points, how much will the buyer need to cover these two items?

To determine the total amount that the buyer will need to cover, we must calculate both the down payment and the cost associated with the discount points.

First, the down payment is based on the purchase price of the building. Since the building was purchased for $350,000 and the buyer is making a 20% down payment, we calculate the down payment as follows:

[

\text{Down Payment} = \text{Purchase Price} \times \text{Down Payment Percentage}

]

[

= 350,000 \times 0.20 = 70,000

]

Next, we calculate the cost associated with the three discount points. Discount points are fees paid to the lender to reduce the interest rate on a loan, with each point costing 1% of the loan amount.

First, we need to determine the loan amount. The loan amount is the purchase price minus the down payment:

[

\text{Loan Amount} = \text{Purchase Price} - \text{Down Payment}

]

[

= 350,000 - 70,000 = 280,000

]

Then we can calculate the cost of the three discount points:

[

\text{Cost of