Question

Tyrell bought a house for $186,500. He has a 30 year mortgage with a fixed rate of 6. 5%. Tyrell’s monthly payments are $1,060. 93. How much was Tyrell’s down payment? a. $12,120 b. $18,650 c. $27,975 d. $37,300.

Answer 1

Based on the information given the down payment is:b. $18,650.

Down payment:

First step is to calculate the loan:

Laon=Monthly payment[1-(1+r)^-n]/r

Loan=$1,060.93[1-(1+0.065/12)^-360]/(0.065/12)

Loan=$1,060.93×158.210819537

Loan= 167,850

Second step is to calculate the down payment:

Down payment = House price - Mortgage

Down payment =$186,500 -$167,850

Down payment =$18,650

Inconclusion  the down payment is: b. $18,650.

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