Final answer:
The total loan amount after making a down payment of $80,000 and receiving a cash credit of $25,000 on a $400,000 home is $295,000.
Step-by-step explanation:
The student's question involves calculating the total loan amount for a home mortgage.
To calculate the total loan amount, you would subtract the down payment and any cash credits from the purchase price of the home. For a home that costs $400,000 with a down payment of $80,000 and a cash credit of $25,000, the calculation is:
$400,000 (home price) - $80,000 (down payment) - $25,000 (cash credit) = $295,000 (total loan amount).
The loan amount of $295,000 is what would remain to be paid off through monthly mortgage payments, which include principal and interest over the term of the loan. In this case, the loan has an interest rate of 3.75% per annum over a period of 15 years, but for the purpose of this question, only the initial loan amount is required.