Question

A house sells for $210,000 and the buyer makes a 20% down payment. determine the down payment amount and the amount financed

A) Down Payment: $20,000, Amount Financed: $190,000
B) Down Payment: $30,000, Amount Financed: $180,000
C) Down Payment: $42,000, Amount Financed: $168,000
D) Down Payment: $50,000, Amount Financed: $160,000
E) Down Payment: $25,000, Amount Financed: $185,000

Answer 1

The correct answer is a down payment of $42,000 and an amount financed of $168,000, as the buyer is making a 20% down payment on a $210,000 house.

Step-by-step explanation:

To calculate the down payment for the house selling for $210,000 at a 20% down payment, we multiply the sale price of the house by the percentage of the down payment.

The down payment is:
$210,000 × 0.20 = $42,000

The amount financed is the sale price of the house minus the down payment. So, the amount financed would be:

$210,000 - $42,000 = $168,000

These calculations demonstrate the typical process of purchasing a home with a mortgage, where a percentage of the home's price is paid up upfrontd the remainder is borrowed from a financial institution.