Question

You have saved $20,000 for a down payment on a house. Your bank requires a minimum down payment of 11%. What is the maximum price you can offer for a home in order to have enough money for the down payment? (Round your answer to two decimal places.)

That's what the answer we are trying to get is the max amount we can offer for a house. The unknown variable is the price of the house we can afford.

Answer 1

Therefore, the maximum price of the house we can offer is $181,818.18, rounded to two decimal places.

Explanation:

et's say the maximum price of the house we can afford is "P". We know that the bank requires a minimum down payment of 11%, which means we have to pay 11% of the price of the house as a down payment to obtain a mortgage.

So, we can write the equation:

0.11P = $20,000

Solving for P, we get:

P = $20,000 / 0.11

P = $181,818.18