First off forgive my bad english. I will do my best to make this understandable.
I'm preparing for a Real Estate exam and I'm having difficulties with the math. I only have an high school education and mathematics have never been my forte.
I was presented with this question:
When Branham brought his property he had a 20% down payment and
secured a 30 year loan at 7% interest. If his first month’s interest was
$787.50, how much did he pay for the property?
I'm sure there must be a formula , given the percentage and monthly interest rates etc... , to calculate the solution?
I figured that one of those prices had to be the right one. I tried to solve it but failed miserably.
This is what I did and i was certain it was the right answear
I started with B. $140.625. I figured Branham had a 20$ down payment so I did 20% of 140.625 , considering that B. was the price he paid for the house. Keep in mind i was going to do this for all the values (a b c d).
Alright so 20% of 140.625 came to $28.125.
I figured it was the right price but nope the right one was C.
I also noticed that i had the answer in front of me the all time. I just had to add 28.125 to 140.625.
I guess that 28.125 is the 20% deposit? If not then why when added to 140.625 it gives me the correct price.