Using the monthly payment formula, it is found that her down payment should be of $1,419.
What is the monthly payment formula?
It is given by:
[tex]A = P\frac{\frac{r}{12}\left(1 + \frac{r}{12}\right)^n}{\left(1 + \frac{r}{12}\right)^n - 1}[/tex]
In which:
- n is the number of payments.
For this problem, the parameters are:
A = 250, r = 0.072, n = 72.
Hence:
r/12 = 0.072/12 = 0.006.
We solve for P to find the total amount of the monthly payments, hence:
[tex]A = P\frac{\frac{r}{12}\left(1 + \frac{r}{12}\right)^n}{\left(1 + \frac{r}{12}\right)^n - 1}[/tex]
[tex]P\frac{0.006(1.006)^{72}}{(1.006)^{72}-1} = 250[/tex]
0.0171452057P = 250
P = 250/0.0171452057
P = $14,581.
The total payment is of $16,000, hence her down payment should be of:
16000 - 14581 = $1,419.
More can be learned about the monthly payment formula at https://brainly.com/question/26476748
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