BACHELOR OF BUSINESS ADMINISTRATION

BUSINESS ADMINISTRATION

BUSINESS MATHEMATICS

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Jason buys a condo for $96, 200. He makes a 5% down payment. How much is the down payment?
A
$4810
B
$481, 000
C
$481
D
$19, 240
Explanation: 

Detailed explanation-1: -Suppose the purchase price of your home is $400, 000. You need a minimum down payment of 5% of the purchase price. The purchase price multiplied by 5% is equal to $20, 000.

Detailed explanation-2: -Down payment is calculated using the formula: down payment = down payment percent times purchase price.

Detailed explanation-3: -Often, a down payment for a home is expressed as a percentage of the purchase price. As an example, for a $250, 000 home, a down payment of 3.5% is $8, 750, while 20% is $50, 000.

Detailed explanation-4: -To purchase a $200, 000 house, you need a down payment of at least $40, 000 (20% of the home price) to avoid PMI on a conventional mortgage. If you’re a first-time home buyer, you could save a smaller down payment of $10, 000–20, 000 (5–10%).

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