Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. you can afford a 1400$ per month mortage payment.

you can afford a 1400$ per month mortage payment. youve found a 30 year loan at a...

Free

70.2K

Verified Solution

Question

Finance

youcan afford a 1400$ per month mortage payment. youve found a 30 yearloan at a 6% interest.

youcan afford a 1400 per month mortage payment. you found a 30 yearloan at 6% interest.

a) how big of a loan can you afford?

b) how much total money will you pay the loan company?

c) how much of that money is interest?

Answer & Explanation Solved by verified expert
3.6 Ratings (459 Votes)

a) $ 2,33,508
Working:
Loan amount is the present value of monthly payment.
Present value of annuity of 1 = (1-(1+i)^-n)/i Where,
= (1-(1+0.005)^-360)/0.005 i 6%/12 = 0.005
= 166.7916144 n 30*12 = 360
Loan amount = Monthly payment * Present value of annuity of 1
= $             1,400 * 166.7916
= $       2,33,508
b) $ 5,04,000
Working;
Total payment on the loan = Monthly payment * Number of months
= $             1,400 * 360
= $       5,04,000
c) $ 2,70,492
Working:
Interest = Total repayment - Amount borrowed
= $       5,04,000 - $ 2,33,508
= $       2,70,492

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Transcribed Image Text

youcan afford a 1400$ per month mortage payment. youve found a 30 yearloan at a 6% interest.youcan afford a 1400 per month mortage payment. you found a 30 yearloan at 6% interest.a) how big of a loan can you afford?b) how much total money will you pay the loan company?c) how much of that money is interest?

Other questions asked by students

Q

In a recent survey, 2033 people were surveyed as to how many people preferred Tinder and...

Statistics
Q

a. If you have two chromatograms of the same mixture, but they are from two different...

Chemistry
Q

What will the molarity be of the resulting solutions made by mixing the following? Assume that...

Chemistry
Q

The Skinner Years McDonald's shows a concern with over-expansion and the strain in can put on...

General Management
Q

Question 8 12 5 points Given the parent function f x x how would the...

Geometry
Q

This question 1 point s possible Consider the following sets U upperclassmen L lowerclassmen S...

Basic Math
Q

PLEASE SOLVE URGENTLY! Sunshine Pty Ltd made a loan of $100,000 to an employee on...

Accounting
Q

Ramer and Knox began a partnership by investing $75,000 and $105,000, respectively. The partners agreed...

Accounting
Q

6 A deferred tax asset arises when a. Permanent differences for future taxable amounts. b....

Accounting
Q

Income statement, owners equity and balance sheet: Accounts Payable $3,500. Accounts Receivable $7,000. Building $13,000....

Accounting
Q

= Homework: Homework 10 Question 6, P13-13 (similar to) > HW Score: 57.29%, 45.83 of...

Finance
Q

SURE Information for two alternative projects involving machinery investments follows. Project 1 requires an initial...

Accounting