You want to purchase a beach house for $220,000 funding as much of the cost as possible with a home mortgage loan. Banks are currently offering standard thirty year mortgages at 8% (monthly compounding). Unfortunately, you can only afford payments of $1.500.00 per month. How much cash will you need for a down payment in order to by the home? (Round to the nearest dollar)
Value = 220,000
Monthly rate = 8%/12 = 0.667%
number of months = 30 ...
The solution determines how much of a cash down payment is needed in order to by a home.