The following steps illustrate how we determine a maximum recommended monthly mortgage payment. You will do a very similar calculation in the Finance Project.

Assume that our annual income is $$64,000$ and that we have no other debt.

What is our monthly income? $($Round your answer to the nearest cent.$)$

Hint: Your annual salary is broken into $12$ equal monthly payments.

$

Lending agencies usually require that no more than $30\%$ of the borrower's monthly income be spent on housing. How much does that represent in our case? $($Round your answer to the nearest cent.$)$

$

The amount we will spend on housing consists of our monthly mortgage payment plus property taxes and hazard insurance. Assume that property taxes plus insurance total $$250$ per month, and subtract this from the amount of our monthly income we can spend on housing to determine what maximum monthly payment we can afford in the eyes of the lending agency. $($Round your answer to the nearest cent.$)$

$