Based on the calculation below, the amount of vanessa’s down payment is $9,314.45.
<h3>Calculation of down payment</h3>
First, we have to calculate the balance after deducting vanessa’s down payment using the formula for calculating the present value (PV) of an ordinary annuity as follows:
PV = P * ((1 - (1 / (1 + r))^n) / r) …………………………………. (1)
Where;
PV = Present value or balance after deducting vanessa’s down payment = ?
P = Monthly payment = $1,595.85
r = Monthly interest rate = 6.25% / 12 = 0.0625 / 12 = 0.00520833333333333
n = number of months = 30 * 12 = 360
Substitute the values into equation (1), we have:
PV = $1,595.85 * ((1 - (1 / (1 + 0.00520833333333333))^360) / 0.00520833333333333) = $259,185.55
Now, the amount of vanessa’s down payment can be calculated as follows:
Vanessa’s down payment = Cost of the house – PV = $268,500 - $259,185.55 = $9,314.45
Learn more about the present value of an ordinary annuity here: brainly.com/question/17112302.
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