John wants to buy a $800000 house. He paid a deposit in cash and takes out a loan for the remaining balance. The loan is to be repaid with equal monthly installments over a period of 20 years. The interest is 10.25% p.a. compounded monthly. Calculate the deposit amount.
Answer (2)
Calculate the deposit amount by multiplying the house price by the deposit percentage.
Deposit percentage is 10% which is equal to 0.10.
Multiply the house price (R800000) by 0.10 to get the deposit amount.
The deposit amount is R 80000 .
Explanation
Understanding the Problem We are given that John wants to buy a house for R800000 and he needs to pay a deposit of 10%. Our goal is to calculate the amount of the deposit.
Calculating the Deposit To find the deposit amount, we need to calculate 10% of the house price, which is R800000. We can do this by multiplying the house price by 0.10 (which is the decimal equivalent of 10%).
Final Calculation and Answer So, the deposit amount is calculated as follows: De p os i t = 0.10 × R 800000 = R 80000 Therefore, the deposit amount is R80000.
Examples
Understanding percentages is crucial in many real-life situations, such as calculating discounts, taxes, and interest rates. For example, if you want to buy a new phone that costs $500 and there is a 15% discount, you can calculate the discount amount by multiplying the price by 0.15 ($500 \times 0.15 = $75). This means you will save $75, and the final price will be $425. Similarly, understanding how to calculate deposits, like in this problem, helps in financial planning when purchasing a house or a car.
John needs to pay a deposit of $80,000 for the $800,000 house. This deposit is calculated as 10% of the house price. The calculation shows that $800,000 multiplied by 0.10 equals $80,000.
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