Question

An individual finances the purchase of a $268,000 house. If the loan-to-value ratio is 72%, how much money was borrowed?

(Loan Amount / Purchase Price = Loan-to-Value Ratio

Answer 1

To find out how much money was borrowed in financing the purchase of a $268,000 house with a 72% loan-to-value ratio, multiply the purchase price by the loan-to-value ratio expressed as a decimal.

Step-by-step explanation:

To find out how much money was borrowed, we need to calculate 72% of the purchase price of the house.

First, we convert the loan-to-value ratio to a decimal by dividing it by 100: 72%/100 = 0.72.

Then, we multiply the purchase price of the house by 0.72 to find the amount borrowed: $268,000 * 0.72 = $193,056.

Therefore, the amount borrowed is $193,056.