Answer:
$21,524.06
Explanation:
For computing the down payment for the house we need to do the following calculations
Monthly income is
= Annual salary ÷ total number of months in a year
= $60,000 ÷ 12 months
= $5,000
Now the maximum payment is
= 28% × $5,000
= $1,400
And, the present value is
= Maximum payment × {1 - 1 ÷ (1 + 0.003)^360} ÷ 0.003
= $307,932.33
The 4% is annual rate and monthly rate is 0.003 and we assume the total number of days in a year is 360 days
Now the closing cost is
= $307, 932.33 × 6%
= $18,475.94
Finally the down payment for the house is
= $40,000 - $18,475.94
= $21,524.06
