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



Please select the best answer from the choices provided


A
B
C
D

Answer 1

A

Compute the loan principal P from the mortgage formula:
P = M * (1 - (1 + r)^(-n)) / r
with M = 1595.85, r = 0.0625/12, n = 360.

P ≈ 1595.85 * ((1 - (1 + 0.0625/12)^(-360)) / (0.0625/12)) ≈ $259,185.55.

Down payment = 268,500 − 259,185.55 ≈ $9,314.45 → choice A.