The cost of a new home is $190,000.00 and the bank requires a 5.8% down payment. What is the amount that will need to be borrowed from the bank after the down payment is paid (also known as the "mortgage amount")? The mortgage amount will be Check Answer
The cost of a new home is $190,000.00 and the bank requires a 5.8% down payment. What is the amount that will need to be borrowed from the bank after the down payment is paid (also known as the "mortgage amount")? The mortgage amount will be Check Answer
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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![### Mortgage Calculation Example
**Problem Statement:**
The cost of a new home is $190,000.00 and the bank requires a 5.8% down payment.
**Question:**
What is the amount that will need to be borrowed from the bank after the down payment is paid (also known as the "mortgage amount")?
**Calculation:**
1. **Determine the down payment amount:**
- \[ \text{Down Payment} = \text{House Cost} \times \text{Down Payment Percentage} \]
- \[ \text{Down Payment} = \$190,000.00 \times 5.8\% \]
- \[ \text{Down Payment} = \$190,000.00 \times 0.058 \]
2. **Perform the multiplication:**
- \[ \text{Down Payment} = \$11,020.00 \]
3. **Calculate the mortgage amount:**
- \[ \text{Mortgage Amount} = \text{House Cost} - \text{Down Payment} \]
- \[ \text{Mortgage Amount} = \$190,000.00 - \$11,020.00 \]
- \[ \text{Mortgage Amount} = \$178,980.00 \]
**Answer:**
The mortgage amount will be \$178,980.00.
- **Input Box:** An interactive box where users can input their calculated mortgage amount.
- **Check Answer Button:** Provides a way for users to confirm their answer is correct.
By understanding each step in the calculation, you can determine the correct mortgage amount needed after making a down payment. This process is essential for anyone planning to purchase a home using bank financing.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa6fffe07-0182-49b4-949f-7de773e92073%2Fc9ab50fb-0a81-4481-8ec4-f8a95e5967c6%2F59f1qk_processed.jpeg&w=3840&q=75)
Transcribed Image Text:### Mortgage Calculation Example
**Problem Statement:**
The cost of a new home is $190,000.00 and the bank requires a 5.8% down payment.
**Question:**
What is the amount that will need to be borrowed from the bank after the down payment is paid (also known as the "mortgage amount")?
**Calculation:**
1. **Determine the down payment amount:**
- \[ \text{Down Payment} = \text{House Cost} \times \text{Down Payment Percentage} \]
- \[ \text{Down Payment} = \$190,000.00 \times 5.8\% \]
- \[ \text{Down Payment} = \$190,000.00 \times 0.058 \]
2. **Perform the multiplication:**
- \[ \text{Down Payment} = \$11,020.00 \]
3. **Calculate the mortgage amount:**
- \[ \text{Mortgage Amount} = \text{House Cost} - \text{Down Payment} \]
- \[ \text{Mortgage Amount} = \$190,000.00 - \$11,020.00 \]
- \[ \text{Mortgage Amount} = \$178,980.00 \]
**Answer:**
The mortgage amount will be \$178,980.00.
- **Input Box:** An interactive box where users can input their calculated mortgage amount.
- **Check Answer Button:** Provides a way for users to confirm their answer is correct.
By understanding each step in the calculation, you can determine the correct mortgage amount needed after making a down payment. This process is essential for anyone planning to purchase a home using bank financing.
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