Use only the given formula Use the formula $PMT=\frac {(P(\frac {r}{n}))}{[1-(1+\frac {r}{n})^{-nt}]}$ to determine the regular payment amount, rounded to the nearest dollar. The price of the home is $350,000. The bank requires a 20% down payment. The cost of the home is financed with a 30-year fixed rate mortgage at an interest rate of 5.5%

Question

a.) What is the minimum down payment the bank requires?

Answer 1

To calculate the minimum down payment required by the bank, we first need to determine the down payment percentage based on the price of the home.

Given:

• Price of the home = $350,000
• Required down payment = 20%

Now, we can calculate the minimum down payment as follows:

\[ \text{Down Payment} = \text{Price of the Home} \times \text{Down Payment Percentage} \]

Substituting the values:

\[ \text{Down Payment} = 350,000 \times 0.20 = 70,000 \]

Therefore, the minimum down payment the bank requires is $70,000.