A lender estimates that the closing costs on a $293,600 home loan will be $11,010. The actual closing costs were 3.25% of the loan amount. Determine if the closing costs were higher or lower than the estimate and by what percent?

The estimated costs were $11,010 ÷ $293,600 = 3.75% of the loan. The actual costs were 3.25%, which is 0.5 percentage points lower than the estimate. So the closing costs were lower by 0.5%, choice D.

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