Question

Help with this consumer math question please! Will give medal to best answer.

Answer 1

So the original price is 187,500 and they will make 20% down payment so that means 187,500 * 0.20 which equals 37,500 that's the down payment. So how much would be left of the original price?
187,500 - 37,500 = 150,000 dollars left

So if they expect to pay 1575 monthly
It would take them 150,000/1575 = 7.936 years to pay the whole mortgage but that's not the point normally the mortgage takes the third of our incomes so if it was indeed the case in this question then
1575 is the third of the monthly income so therefore the full monthly income would be 1575 * 3 = 4725 dollars monthly should be their income.
That's what I know about the banks mortgages. And how they calculate them

Answer 2

Okay first step , Grab the amount of payment per month (1,575) and grab the interest rate towards the mortgage (4.65%)

Keep those in mind as those youll keep an eye on
Now take the amount of the house they are buying (187,500)

Now there down payment is 20% of the total amount of the house - 187,500
Then divide the down payment towards the payment of the house

187,500 divided by 20% = 37,500

Okay now subtract the down payment with the current total amount for the house (187,500)

Now 187,500 - 37,500 = 150,000
Take the interest rate and divide it with the actual current amount left of the house

150,000 divided by 4.65% = 6,975

So the parents are wrong , they will be paying actually more than expected. Cause try dividing 187,500 with the interest rate. It would be an error

So there income should be at least 6,975 to pay the monthly fee , if that makes sense

Please tag me for any further questions or concerns , thanks!

Answer 3

Dont quote me , i might be wrong explaining but i hope it helps :)

Answer 4

Sorry I was away, didn't expect to get help for this problem.

There is a formula they gave us to use to determine realized income, it's:
\[\frac{ $rent/month }{ x }\] = \[\frac{ 28 }{ 100 }\]

Answer 5

Oops those are supposed to be on the same line. Oh well.

You're supposed to use that proportion to figure out the realized income.

Answer 6

The thing is, I don't know if you're supposed to do anything with the other numbers when you can simply use that equation to figure out the realized income. That's why I posted it on here.
@Frozen15

Answer 7

hmm okay now thats where it start to confuse me lolol

Answer 8

What do you think? I got $5625/month only using the equation and the expected income.

Answer 9

I'm thinking 6,975 since that's the fee per month. just for whatever I did I got that as a final answer

Answer 10

You need to use the proportion at some point during this equation though.