The example uses a purchase price of 100,000 with an 80% loan-to-value. What is the loan amount in this scenario?

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Multiple Choice

The example uses a purchase price of 100,000 with an 80% loan-to-value. What is the loan amount in this scenario?

Explanation:
Loan-to-value shows how large the loan is compared to the purchase price. It’s calculated by multiplying the purchase price by the LTV percentage. With a purchase price of 100,000 and an 80% LTV, the loan amount is 0.80 × 100,000 = 80,000. The remaining 20,000 would be the down payment. The other amounts correspond to different scenarios (a smaller down payment or a lower LTV), but for an 80% LTV, the correct loan amount is 80,000.

Loan-to-value shows how large the loan is compared to the purchase price. It’s calculated by multiplying the purchase price by the LTV percentage. With a purchase price of 100,000 and an 80% LTV, the loan amount is 0.80 × 100,000 = 80,000. The remaining 20,000 would be the down payment. The other amounts correspond to different scenarios (a smaller down payment or a lower LTV), but for an 80% LTV, the correct loan amount is 80,000.

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