Question

Julio just bought a $267,900 house. he had a 20 year mortgage with a fixed rate of 5.875%. julio’s monthly payments are $1,558.09. what percent of the purchase price was julio’s down payment? a. 13% b. 15% c. 18% d. 20%

Answer 1

The percent of the purchase price for Julio’s down payment was C. 18%

What is Interest Rate?

This refers to the amount of money that is added to a loan collected by a person, for when he makes repayment.

Hence,

Given that

• PMT monthly payment 1558.09
• R interest rate 0.05875
• K compounded monthly 12 because the payment is monthly
• N time 20 years
• Pv present value?

We use the formula Pv=pmt [(1-(1+r/k)^(-kn))÷(r/k)]

Pv= 1,558.09×((1−(1+0.05875÷12)^(−12×20))÷(0.05875÷12))

=219,684.92

Next thing to do is make a subtraction to get the down payment:

267,900−219,684.92=48,215.08

Then the percentage would be:

48,215.08÷267,900= 18% approx.

Read more about interest rates here:

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