2. A standard rule for lenders is that a family's house payment should not exceed 28%...

 

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2. A standard rule for lenders is that a family's house payment should not exceed 28% of their monthly income. For a family making $5000 per month, this would equate to $1400 per month. Assuming monthly costs of $250 for property tax and homeowner's insurance, this would allow for a $1150 monthly mortgage payment. P.! n (1-(1+²7)-n²) The formula M = (solving for P this time) or the Excel function "pv" can be used to compute the mortgage a family could afford. If using Excel the 3 arguments of function "pv" are: MATH 114 Rate (the monthly interest rate): 0.035/12 Nper (the total number of monthly payments) and Pmt (the monthly mortgage amount) a. Assuming that a family wants to make a $1150 monthly payment, give the mortgage that a family could afford at an annual interest rate 3.50% for a 15-year mortgage. b. Assuming that a family wants to make a $1150 monthly payment, give the mortgage that a family could afford at an annual interest rate 3.5% for a 30-year mortgage. 2. A standard rule for lenders is that a family's house payment should not exceed 28% of their monthly income. For a family making $5000 per month, this would equate to $1400 per month. Assuming monthly costs of $250 for property tax and homeowner's insurance, this would allow for a $1150 monthly mortgage payment. P.! n (1-(1+²7)-n²) The formula M = (solving for P this time) or the Excel function "pv" can be used to compute the mortgage a family could afford. If using Excel the 3 arguments of function "pv" are: MATH 114 Rate (the monthly interest rate): 0.035/12 Nper (the total number of monthly payments) and Pmt (the monthly mortgage amount) a. Assuming that a family wants to make a $1150 monthly payment, give the mortgage that a family could afford at an annual interest rate 3.50% for a 15-year mortgage. b. Assuming that a family wants to make a $1150 monthly payment, give the mortgage that a family could afford at an annual interest rate 3.5% for a 30-year mortgage.

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