If a bank charged $2,400 in points on a loan amount of $120,000, how many points were charged?

To determine how many points were charged on the loan, it's important to understand what a point represents in the context of real estate financing. One point equals one percent of the total loan amount.

In this case, the loan amount is $120,000. Therefore, one point would equal $1,200 (which is 1% of $120,000).

The total amount charged in points is $2,400. To find the number of points charged, you would divide the total amount charged by the amount of one point:

$2,400 (total points charged) ÷ $1,200 (value of one point) = 2 points.

Thus, the correct answer indicates that 2 points were charged based on the total fees assessed relative to the loan amount. This computation reflects a clear understanding of how points are calculated in loan transactions and illustrates the relationship between loan amounts and associated costs.