A client asks about a home mortgage for a property that is valued at $500,000. They explain that they need a 65% loan and can pay the remainder in cash as a down payment. How much is their down payment?
i) $175,000
ii) $275,000
iii) $325, 000
iv) $350,000
I know this might seem like a simple question, but I need to make sure I solve this example correctly before I start doing real questions. Can someone help me?
My work:
($500,000)(0.65) $= $325,000$
Then
$500,000 - $325,000 = $175,000
Answer is:
$175,000
Your work seems correct. Find the part of the total that the loan is covering and subtract that from the total to find what remains to be paid (as a down payment).