Can someone explain this?

[cavil]

If MacDonald makes a 10% down payment, then the most he can pay for his new home = $191,517.76 / (1 - 0.10) = $212,797.51 ≈ $212,800.

So, is it similar to discounting when someone makes a down payment ?

I would like to know how the denominator (1-0.10) came in to existence. I know it's fundamental question but I'm trying to have a strong foundation. Thanks in advance.

 

[beingthatguy]

Amount of Loan * (1-.10) = 191,517.76

Adjusted = Amount of Loan = 191,517.76/(1-.10)

 

[cavil]

Boy! The closer I get, the more I doubt my fundamentals. It will NOT happen again.
Thanks man



Edited 1 time(s). Last edit at Monday, December 1, 2008 at 05:07PM by cavil.