Question

he happy couple plan to use their $40,000 is savings to cover the closing costs the bank will charge them, which are 1% of the amount they borrow from the bank. The rest of the savings will be used as a down payment. So if they borrow $330,000 using $20,000 for a down payment, the closing costs will be $3,300; but they did not use all of their savings up. Determine the largest amount they can use for a down payment and still pay the closing costs.

Answer 1

They can borrow up to 4,000,000 dollars which, uses all of his savings to pay the closing costs.

Step-by-step explanation:

The happy couple has 40,000 in savings to cover the closing cost.

The closing cost are 1% of the amount the couple can borrow.

mortgage x 1% = closing cost

the largest amount will be if closing cost are 40,000:

mortgage x 1% = 40,000

mortgage = 40,000 / 0.01 = 4,000,000

They can borrow up to 4,000,000 dollars which, uses all of his savings to pay the closing costs.