Question

the price of a condominium is $120,000. the bank requires a 5% down - payment and one point at the time of closing. the cost of the condominium is financed with a 30 - year fixed - rate mortgage at 8.5%. use the following formula to determine the regular payment amount. complete parts (a) through (e) below.
pmt=\frac{pleft(\frac{r}{n}
ight)left1-left(1 + \frac{r}{n}
ight)^{-nt}
ight}{1-left(1+\frac{r}{n}
ight)^{-nt}}
a. find the required down payment

Explanation:

Step1: Identify the price and down - payment percentage

The price of the condominium $P = 120000$, and the down - payment percentage is $5\%$.

Step2: Calculate the down - payment amount

The down - payment amount $D$ is calculated as $D = 0.05\times P$. Substitute $P = 120000$ into the formula: $D=0.05\times120000 = 6000$.

Answer:

$6000$