4
QuizMultiple Choice

Mortgages and Home Ownership — Unit test

Question 4 • Personal Finance - EL3403

If someone buys a home for $200,000 and makes a 20 percent down payment, that person will have to

Answer
A
pay $20,000 up front.
B
pay $40,000 up front.
C
take out a mortgage for $200,000.
D
take out a mortgage for $220,000.

Explanation

A 20 percent down payment on a $200,000 home is 0.20 × $200,000 = $40,000. The buyer pays that amount up front, leaving $160,000 to finance with a mortgage. So the correct choice is “pay $40,000 up front.”

AI-written and checked against the verified answer.

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