8
QuizMultiple Choice

Applying for a Loan

Question 8 • 2025-2026 GSP Mathematical Reasoning for Decision Making

How would a bigger down payment be beneficial to borrowers?

Answer
A
A bigger down payment is only beneficial for a person applying for a home loan.
B
A bigger down payment is essentially a bribe to the dealership, guaranteeing a few extra bells and whistles for free.
C
A bigger down payment means that the borrower has more money, and can afford a bigger loan.
D
A bigger down payment is money paid toward principal, interest free, which also decreases the amount paid monthly.

Explanation

A down payment is paid upfront toward the purchase price, so the borrower needs to finance less. Because less principal is borrowed, the borrower generally pays less interest over time and has lower monthly payments. Choice D correctly describes this benefit; a larger down payment does not automatically mean someone can afford a bigger loan.

AI-written and checked against the verified answer.

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