Question

Vanessa bought a house for $268,500. She has a 30 year mortgage with a fixed rate of 6.25%. Vanessa’s monthly payments are $1,595.85. How much was Vanessa’s down payment?
a.
$9,314.45
b.
$16,781.25
c.
$40,275.00
d.
$53,040.00

Answer 1

Let the loan amount be L. Monthly rate r = 6.25%/12 = 0.0052083333, n = 30·12 = 360. The mortgage formula gives

L = 1595.85 * (1 - (1 + r)^-n) / r.

Evaluating this (r = 1/192) gives L ≈ $259,185.55. Thus the down payment = 268,500 − 259,185.55 ≈ $9,314.45.

Answer: (a) $9,314.45.