he price of a home is $189 comma 000. The bank requires a 20% down payment and three points at the time of closing. The cost of the home is financed with a 30-year fixed-rate mortgage at 6.5%. Find the required down payment.
Question
he price of a home is $189 comma 000. The bank requires a 20% down payment and three points at the time of closing. The cost of the home is financed with a 30-year fixed-rate mortgage at 6.5%. Find the required down payment.
Solution
The down payment is calculated as a percentage of the home price. In this case, the bank requires a 20% down payment.
Step 1: Convert the percentage to a decimal by dividing by 100. So, 20% becomes 0.20.
Step 2: Multiply the home price by the decimal.
So, 37,800
Therefore, the required down payment is $37,800.
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