Question

A house sold for $65,000. the buyer paid $3,000 in closing costs. the loan amount was 97% of the first $25,000 and 85% of the remaining balance. what was the loan amount?

Answer 1

To find the loan amount, subtract the closing costs from the selling price. Calculate the loan amount as a percentage of the first $25,000 and the remaining balance. Add the two amounts together to get the total loan amount.

Step-by-step explanation:

To find the loan amount, we need to calculate the remaining balance after deducting the closing costs from the selling price of the house. Let's break it down step by step:

1. First, subtract the closing costs ($3,000) from the selling price ($65,000) to get the remaining balance: $65,000 - $3,000 = $62,000.
2. Next, calculate 97% of the first $25,000: 97% x $25,000 = $24,250.
3. Then, subtract $25,000 from the remaining balance to find the amount eligible for the 85% calculation: $62,000 - $25,000 = $37,000.
4. Now, calculate 85% of the remaining balance: 85% x $37,000 = $31,450.
5. Finally, add the amounts from step 2 and step 4 to find the total loan amount: $24,250 + $31,450 = $55,700.

Therefore, the loan amount for the house is $55,700.