How much will be paid out of the closing for the points in a $68,000 loan with 4 points?

The correct calculation of points on a loan is based on the percentage of the loan amount. In this case, you need to determine what 4 points amounts to when applied to the $68,000 loan. Points are calculated as a percentage of the total loan amount, where one point equals one percent.

To find the dollar amount for 4 points, you multiply the loan amount by the number of points expressed as a percentage:

1. Convert points to a decimal: 4 points = 4% = 0.04.

2. Multiply the loan amount by this decimal:

[

68,000 \times 0.04 = 2,720.

]

Therefore, the amount to be paid out of closing for the points on a $68,000 loan at 4 points is $2,720. This calculation accurately reflects the cost associated with the points based on the loan amount, leading to the determination that the correct answer is indeed $2,720.