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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) $460,460; 10% down

The amount to be financed is ............... $ The down payment is ................ $

(b) $730,000; 20% down

The amount to be financed is ................ $ The down payment is ................ $

Down Payment

The downpayment when taking a loa refers to the amount that the borrower pays upfront. The loan taken then is equal to the difference between the price of the item and the downpayment.

Answer and Explanation:


a) The down payment is 10% of the cost of the home. This will be equal to {eq}0.10*460460=\$46046 {/eq}.

The amount to be financed will be the amount left after the downpayment has been made. This is {eq}460460-46046=\$414414 {/eq}.


b) Here, the down payment will be {eq}0.20*730000=\$146000 {/eq}. The amount to be financed will be {eq}730000-146000=\$584000 {/eq}.


Learn more about this topic:

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Buying a House: Mortgage Types & Loan Length

from Finance 102: Personal Finance

Chapter 7 / Lesson 4
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