If a buyer puts 10% down on a building sold at $180,000 and is charged a 1% loan origination fee, what is the total amount used for the purchase?

If a buyer puts 10% down on a building sold at $180,000 and is charged a 1% loan origination fee, what is the total amount used for the purchase?

• A. $17,720
• B. $18,900
• C. $19,620
• D. $20,000

Answer: (C)

To calculate the total amount used for the purchase, we start by determining the down payment and the loan origination fee. First, the buyer is putting down 10% on a property that costs $180,000. The down payment is calculated as follows: - Down Payment = 10% of $180,000 - Down Payment = 0.10 x $180,000 = $18,000 Next, we need to establish the loan amount. Since the buyer will finance the remaining balance through a loan, we find the loan amount by subtracting the down payment from the purchase price: - Loan Amount = Purchase Price - Down Payment = $180,000 - $18,000 = $162,000 The next step is to calculate the loan origination fee, which is 1% of the loan amount: - Loan Origination Fee = 1% of $162,000 = 0.01 x $162,000 = $1,620 Finally, the total amount used for the purchase incorporates both the down payment and the loan origination fee: - Total Amount Used = Down Payment + Loan Origination Fee = $18,000 + $1,620 = $19,620 Thus,

To calculate the total amount used for the purchase, we start by determining the down payment and the loan origination fee.

First, the buyer is putting down 10% on a property that costs $180,000. The down payment is calculated as follows:

• Down Payment = 10% of $180,000

• Down Payment = 0.10 x $180,000 = $18,000

Next, we need to establish the loan amount. Since the buyer will finance the remaining balance through a loan, we find the loan amount by subtracting the down payment from the purchase price:

• Loan Amount = Purchase Price - Down Payment = $180,000 - $18,000 = $162,000

The next step is to calculate the loan origination fee, which is 1% of the loan amount:

• Loan Origination Fee = 1% of $162,000 = 0.01 x $162,000 = $1,620

Finally, the total amount used for the purchase incorporates both the down payment and the loan origination fee:

• Total Amount Used = Down Payment + Loan Origination Fee = $18,000 + $1,620 = $19,620

Thus,