# Determine the down payment and the amount to be financed for each home described below. A)...

## Question:

Determine the down payment and the amount to be financed for each home described below.

A) {eq}\$340,340; 10 \% {/eq} down B) {eq}\$870,000; 20 \% {/eq} down

## Loans

When taking a home loan, the entire cost of the house is not taken as a loan. Instead, a certain amount is paid upfront. This is the down payment. The rest is taken as a loan.

A) The downpayment will be 10% of the cost of the house. The amount to be financed will be the remaining amount. So,

\begin{align} \text{Downpayment}&=10\%*340340\\ &=\34034\\ \text{Amount to be financed}&=340340-34034\\ &=\306306 \end{align}

B) Similarly to A, we have:

\begin{align} \text{Downpayment}&=20\%*870000\\ &=\174000\\ \text{Amount to be financed}&=870000-174000\\ &=\696000 \end{align}