If the purchase price is 150,000 and the loan-to-value ratio is 80%, what is the loan amount?

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Multiple Choice

If the purchase price is 150,000 and the loan-to-value ratio is 80%, what is the loan amount?

Explanation:
Loan-to-value shows how much of the purchase price a lender will finance. To get the loan amount, multiply the purchase price by the LTV. Here, 150,000 × 0.80 equals 120,000, so the loan amount is 120,000. The remaining 30,000 would be the down payment (150,000 − 120,000).

Loan-to-value shows how much of the purchase price a lender will finance. To get the loan amount, multiply the purchase price by the LTV. Here, 150,000 × 0.80 equals 120,000, so the loan amount is 120,000. The remaining 30,000 would be the down payment (150,000 − 120,000).

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