Use [tex]PMT =[/tex] $\qquad$ [tex]P\left(\frac{I}{n}\right)[/tex] [tex]{-n t}[/tex] to determine the regular payment amount, rounded to the nearest dollar. The price of a home is $174,000. 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 10%. Complete parts (a) through (e) below.
a. Find the required down payment.
$34800
b. Find the amount of the mortgage.
$
Answer (2)
Calculate the mortgage amount by subtracting the down payment from the price of the home.
Mortgage Amount = $174 , 000 − $34 , 800 .
Perform the subtraction to find the mortgage amount.
The amount of the mortgage is $139 , 200 .
Explanation
Understanding the Problem We are given the price of a home ($174,000) and the down payment percentage (20%). We already found the down payment amount to be $34,800. Now 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 Mortgage Amount = $174,000 - $34,800 Mortgage Amount = $139,200
Final Answer Therefore, the amount of the mortgage is $139 , 200 .
Examples
When purchasing a home, understanding the mortgage amount is crucial for budgeting and financial planning. Knowing the mortgage amount helps determine monthly payments, interest accrued over time, and the overall cost of homeownership. For example, if you buy a car for $25 , 000 and put down $5 , 000 , your mortgage (loan) amount is $20 , 000 . This concept applies to various loans, helping individuals manage their finances effectively.
The required down payment for the home is $34,800, and the amount of the mortgage after subtracting the down payment from the home price is $139,200.
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