The price of a condominium is $179,000. The bank requires a 5% down payment and one point at the time of closing. The cost of the condominium is financed with a 30-year fixed-rate mortgage at 6.5%. Use the following formula to determine the regular payment amount. Complete parts (a) through (b) below.
[tex]PMT=\frac{P\left(\frac{r}{n}\right)}{\left[1-\left(1+\frac{r}{n}\right)^{-nt}\right]}[/tex]
a. Find the required down payment.
$8950
b. Find the amount of the mortgage.
Answer (2)
Calculate the mortgage amount by subtracting the down payment from the price of the condominium.
Mortgage Amount = Price of Condominium - Down Payment
Substitute the given values: Mortgage Amount = $179,000 - $8950
Calculate the mortgage amount: Mortgage Amount = $170 , 050
Explanation
Understanding the Problem We are given that the price of the condominium is $179,000 and the down payment is $8950. We need to find the amount of the mortgage.
Finding the Mortgage Amount To find the amount of the mortgage, we subtract the down payment from the price of the condominium. That is:
Mortgage Amount = Price of Condominium - Down Payment
Substituting the Values Substituting the given values, we have:
Mortgage Amount = $179,000 - $8950
Calculating the Mortgage Amount Performing the subtraction, we get:
Mortgage Amount = $170,050
Final Answer Therefore, the amount of the mortgage is $170,050.
Examples
When purchasing a house, understanding the mortgage amount is crucial for budgeting and financial planning. Knowing the mortgage amount helps in estimating monthly payments, property taxes, and insurance costs. This calculation is also essential for determining the overall affordability of the property and making informed decisions about homeownership.
The required down payment is $8,950, and the amount of the mortgage calculated by subtracting the down payment from the price of the condominium is $170,050. This helps understand the financing involved in purchasing a condominium.
;
