Chapter 5.1, Problem 44E

Sam Needham bought a house from Sheri Silva for $238,300. In lieu of a 20% down payment, Ms. Silva accepted a 10% down payment at the time of the sale and a promissory note from Mr. Needham for the remaining 10%, due in four years. Mr. Needham also agreed to make monthly interest payments to Ms. Silva at 9% interest until the note expires. Mr. Needham obtained a loan for the remaining 80% of the purchase price from his bank. The bank in turn paid Ms. Silva the remaining 80% of the purchase price, less a sales commission (of 6% of the sales price) paid to the sellers’ and the buyers’ real estate agents.

a. Find Mr. Needham’s down payment.

b. Find the amount that Mr. Needham borrowed from his bank.

c. Find the amount that Mr. Needham borrowed from the Ms. Silva.

d. Find Mr. Needham’s monthly interest-only payment to Ms. Silva.

e. Find Ms. Silva’s total income from all aspects of the down payment (including the down

Payment, the amount borrowed under the promissory note, and the monthly payments required by the note).

f. Find Ms. Silva’s income from Mr. Needham’s bank.

g. Find Ms. Silva’s total income from all aspects of the sale.