Mateo wants to borrow money to buy a house. He can afford $1,700 monthly for the mortgage (principle and interest). He found a bank that offered him 3.2% interest on a 30-year loan. What is the maximum amount that Mateo could borrow? For this one, round to the nearest hundred.

Part a) (2 pts) Which formula is appropriate for this problem? (Simple Interest, Compound Interest, Savings Annuity, Payout Annuity, Monthly Payment on a Loan, Maximum Loan Amount, Future Value Needed (if making a one-time deposit), or Future Value Needed (if making multiple deposits))

Part b) (5 pts) How much can Mateo borrow? For this problem round the answer to the nearest hundred.

• Write out
  • 1) the correct formula with variables (e.g. P₀, P_N, N, r, etc.), and
  • 2) the correct formula with the numerical values (round your answer to the nearest hundred), and
  • 3) write the answer in a complete sentence.