Description
1. Your classmate tells you the details of the great deal he got on his mortgage: 30-year 3.5% fixed rate with a 10% down payment.
a. If his new home costs $136,000,
what is his down payment?
B. How much is he going to borrow to
buy the house (assuming he only has the money to make the down payment from
part a)?
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Explanation & Answer
a) His down payment is 10% of $136,000 = $13,600.
b) He is going to borrow the rest, that is, $136,000 - $13,600 = $122,400.
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