Question

Salma and coron broomall have reached an agreed upon price of $197,000. They plan to make a 30 percent down payment and finance the rest at 6 percent for 20 years. What is the monthly payment? What is the total amount to be paid?

Answer 1

1. The monthly payment is $689.5

2. The total amount to be paid is

$224,580.

Explanation:

Salsa and Corn Broom all reached an agreement upon the price of $197,000.

- The plan on making a 30 percent down payment. This implies that the will pay 0.3 × $197,000 = $59,100

This leaves them with

$197,000 - $59,100

= $137,900 to pay.

The plan on financing this remaining amount at 6 percent for 20 years.

This means they will pay

0.06 × $137,900 = $8,274 for 20 years. This translates to the payment of $8,274 × 20 = $165,480 across the 20 years.

1. The monthly payment is the yearly payment divided by 12.

Which is $8,274 ÷ 12 = $689.5

2. The total amount to be paid is

$165,480 + $59,100

= $224,580.