A buyer takes out a loan for $50,000 at 5% simple annual interest. The buyer informs the lender that over the first two years, he can only afford to pay off the interest and none of the principal amount. Given this information, the lender charges the buyer a 2-point loan discount up front and reduces the annual interest rate on the loan to 4%. How much more profit will the lender make in the first two years than she would if she hadn't charged the discount?

Real estate math commonly covers commissions, property taxes, area/acreage, and loan calculations, frequently using a T-chart method (Part/Total Rate).