Question```latex
\text{Find the amount of the down payment (rounded to the nearest hundred dollars) necessary for the buyer to afford the monthly payments for the described home. (Use this table to calculate your answer.)}
\text{Monthly salary of } \$1,815, \text{ with monthly bills of } \$245; \$89,000 \text{ home with a 30-year } 9\% \text{ loan}
\text{Monthly Cost to Finance } \$1,000
\begin{tabular}{|c|c|c|c|c|c|c|}
\hline \multirow[b]{2}{*}{Rate of Interest} & \multicolumn{6}{|c|}{Number of Years Financed} \\
\hline & \begin{array}{l}
5 \text{ years} \\
N=60
\end{array} & 10 \text{ years}
N=120 & 15 \text{ years}
N=180 & \begin{array}{l}
20 \text{ years} \\
N=240
\end{array} & \begin{array}{l}
25 \text{ years} \\
N=300
\end{array} & 30 \text{ years}
N=360 \\
\hline 6.0\% & 19.33 & 11.10 & 8.44 & 7.16 & 6.44 & 6.00 \\
\hline 6.5\% & 19.57 & 11.35 & 8.71 & 7.46 & 6.75 & 6.32 \\
\hline 7.0\% & 19.80 & 11.61 & 8.99 & 7.75 & 7.07 & 6.65 \\
\hline 7.5\% & 20.04 & 11.87 & 9.27 & 8.06 & 7.39 & 6.99 \\
\hline 8.0\% & 20.28 & 12.13 & 9.56 & 8.36 & 7.72 & 7.34 \\
\hline 8.5\% & 20.52 & 12.40 & 9.85 & 8.68 & 8.05 & 7.69 \\
\hline 9.0\% & 20.76 & 12.67 & 10.14 & 9.00 & 8.39 & 8.05 \\
\hline 9.5\% & 21.00 & 12.94 & 10.44 & 9.32 & 8.74 & 8.41 \\
\hline 10.0\% & 21.25 & 13.22 & 10.75 & 9.65 & 9.09 & 8.78 \\
\hline 10.5\% & 21.49 & 13.49 & 11.05 & 9.98 & 9.44 & 9.15 \\
\hline 11.0\% & 21.74 & 13.77 & 11.37 & 10.32 & 9.08 & 9.52 \\
\hline 11.5\% & 21.99 & 14.06 & 11.68 & 10.66 & 10.16 & 9.90 \\
\hline 12.0\% & 22.24 & 14.35 & 12.00 & 11.01 & 10.53 & 10.29 \\
\hline
\end{tabular}
Studdy Solution
STEP 1
1. The buyer's monthly salary is 245.
3. The home costs 1,000 at various interest rates and terms.
STEP 2
1. Calculate the maximum affordable monthly mortgage payment.
2. Determine the monthly cost per $1,000 financed using the table.
3. Calculate the total loan amount that can be financed.
4. Calculate the necessary down payment.
STEP 3
Calculate the maximum affordable monthly mortgage payment using 28% of the buyer's gross monthly income:
Subtract monthly bills from the maximum payment:
STEP 4
Using the table, find the monthly cost to finance $1,000 for a 30-year loan at 9% interest:
STEP 5
Calculate the total loan amount that can be financed based on the affordable mortgage payment:
STEP 6
Calculate the necessary down payment:
Round the down payment to the nearest hundred dollars:
The amount of the down payment necessary is:
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