John and Tara are buying a $105,000 house and putting 20% down. The bank is offering a 25 year loan at 7.5% compounded monthly. What is the loan amount?
John and Tara are putting up 20% of the cost of the house.
So, the Bank must be putting up the other 80% of the cost.
The loan then will be 80% of the cost of the house.
Loan = 0.8 * 105,000 = 84,000
Loan Amount = $84,000