Use PMT $=\frac{P\left(\frac{r}{n}\right)}{[ }$ to determine the regular payment amount, rounded to the nearest dollar. The price of a home is $218,000. The 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 7% parts (a) through (e) below.
a. Find the required down payment.
$ 43600
b. Find the amount of the mortgage.
$ $\square$
Answer (1)
Calculate the mortgage amount by subtracting the down payment from the price of the home.
Mortgage Amount = $218,000 - $43,600
Perform the subtraction to find the mortgage amount.
The amount of the mortgage is $174 , 400 .
Explanation
Understanding the Problem We are given that the price of the home is $218,000 and the down payment is $43,600. We need to find the amount of the mortgage, which is the price of the home minus the down payment.
Calculating the Mortgage Amount To find the amount of the mortgage, we subtract the down payment from the price of the home: M or t g a g e A m o u n t = P r i ceo f Ho m e − Do w n P a y m e n t M or t g a g e A m o u n t = $218 , 000 − $43 , 600
Result Performing the subtraction, we get: M or t g a g e A m o u n t = $174 , 400
Examples
When buying a car, the amount you finance (the mortgage amount in this problem) is the total cost of the car minus your down payment. Understanding how to calculate this helps you determine your loan amount and monthly payments, which is crucial for budgeting and financial planning. For example, if a car costs $25,000 and you put down $5,000, the amount you need to finance is $25,000 - $5,000 = $20,000.
