What percentage is Henry's loan origination fee?

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Multiple Choice

What percentage is Henry's loan origination fee?

Explanation:
Loan origination fees are the lender’s charge for evaluating and preparing a loan, and they’re typically shown as a percentage of the loan amount. In this scenario, the fee is stated as 1% of the loan, so the origination charge equals one percent of whatever Henry borrows. That makes 1% the correct match for the fee described. If the problem had specified different percentages, those would yield different dollar amounts (for example, 0.5% would be half as much, 2% would be double), which is why the given setup points to 1% as the right figure.

Loan origination fees are the lender’s charge for evaluating and preparing a loan, and they’re typically shown as a percentage of the loan amount. In this scenario, the fee is stated as 1% of the loan, so the origination charge equals one percent of whatever Henry borrows. That makes 1% the correct match for the fee described.

If the problem had specified different percentages, those would yield different dollar amounts (for example, 0.5% would be half as much, 2% would be double), which is why the given setup points to 1% as the right figure.

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