Question

You want to purchase your first house. A conventional mortgage will require a credit score of approximately 630. Your credit score is 560. You need to increase it by 70 points to get to 630. If you increase your score by 12% per year, how many years will it take to lift your score to 630?

Answer 1

11

Explanation:

Answer 2

a) 1.1 yrs

Explanation:

THESE ARE OPTIONS FOR THE QUESTION BELOW;

a) 1.1 yrs

b) 2.3 yrs

c) 26 yrs.

d) 12 yrs.

✓At initial year (0 year) credit score =560 points

Then the score is increased by 12% per year, with this 12% increase we have 702.4 points in the 1st year

✓At the first year(1st year)

(12/100)× 560 points of the initial year.

= 627points

✓ At second year (2nd year), the 627points

increases by 12% again.

(12/100)× 627.2 points of the initial year.

= 702.4points

There was 75.2 increase between istyear and second year(702.4points - 627points)

Since, We have 12 month in a year, that means there is 6.2 points per month (75.2/12) for the year .

After second year we had 627points, with increase of 6.2point, Then at 1.1 year we would have score of 630 points