Question

Max is buying a home for $250,000. He will pay 3% in closing costs and 12% for the down payment. Calculate how much he will pay for each of these one-time fees.

a) Closing costs: $7,500, Down payment: $30,000
b) Closing costs: $10,000, Down payment: $25,000
c) Closing costs: $5,000, Down payment: $35,000
d) Closing costs: $15,000, Down payment: $20,000

Answer 1

Max will pay $7,500 for closing costs and $30,000 for the down payment on the $250,000 home he is buying. These amounts are calculated by applying the respective percentages of the home's purchase price.

Step-by-step explanation:

To calculate the one-time fees Max will have to pay for the closing costs and the down payment, we use the following calculations:

First, calculate the closing costs by multiplying the home price by the closing cost percentage: $250,000 * 0.03.

Second, calculate the down payment by multiplying the home price by the down payment percentage: $250,000 * 0.12.

The correct calculations will give us:

Closing costs: $250,000 * 0.03 = $7,500.

Down payment: $250,000 * 0.12 = $30,000.

Therefore, the correct answer to how much Max will pay for each of these one-time fees is:

Closing costs: $7,500

Down payment: $30,000