Sukhpal is considering purchasing a pre-construction condominium unit in Surrey for $550,000. The builder requires a total deposit of 20% of the purchase price, spread over 18 months, with the final 5% due 30 days before occupancy. Sukhpal has saved $50,000. How much more will Sukhpal need to save or secure for builder deposits between now and closing, assuming he has a plan for the remaining down payment at closing?

Question: Sukhpal is considering purchasing a pre-construction condominium unit in Surrey for $550,000. The builder requires a total deposit of 20% of the purchase price, spread over 18 months, with the final 5% due 30 days before occupancy. Sukhpal has saved $50,000. How much more will Sukhpal need to save or secure for builder deposits between now and closing, assuming he has a plan for the remaining down payment at closing?

Answer options:

• $50,000 ✅ $60,000
• $40,000
• $70,000

Correct answer: $60,000

Explanation: The total builder deposit required is 20% of $550,000 = $110,000. Sukhpal has saved $50,000. Therefore, he needs to save or secure an additional $110,000 - $50,000 = $60,000 for the builder deposits.