Question

Question

Carl and Carla are buying a new house. They know the house will cost $150,000 and the closing costs will be 4 percent of the home’s purchasing price. How much will they have to save for the closing costs and recommended down payment?
Responses

$36,000
$36,000

$6,000
$6,000

$50,000
$50,000

$30,000

Answer 1

To calculate how much Carl and Carla will need to save for the closing costs and recommended down payment, let's break it down step by step.

1. Price of the house: $150,000

2. Closing Costs: These are 4% of the purchasing price. So, we calculate: \[ \text{Closing Costs} = 0.04 \times 150,000 = 6,000 \]

3. Down Payment: The standard recommended down payment is typically 20% of the home’s price (but this can vary). If we use 20% for this calculation, it would be: \[ \text{Down Payment} = 0.20 \times 150,000 = 30,000 \]

4. Total Amount to Save: Now, we combine the two amounts: \[ \text{Total Savings} = \text{Closing Costs} + \text{Down Payment} = 6,000 + 30,000 = 36,000 \]

Thus, Carl and Carla will need to save a total of $36,000 for both the closing costs and the recommended down payment.

So the correct response is:

$36,000