Sub : EconomicsPls answer very fast.I ll upvote correct answer. Thank You Develop a spreadsheet model to determine how much a person or a couple can afford to spend on a house. Lender guidelines suggest that the allowable monthly housingexpenditure should be no more than 28% of monthly gross income. From this, you must subtract total nonmortgage housing expenses, which would include insurance and propertytaxes and any other additional expenses. This defines the affordable monthly mortgage payment. In addition, guidelines also suggest that total affordable monthly debt payments,including housing expenses, should not exceed 36% of gross monthly income. This is calculated by subtracting total nonmortgage housing expenses and any other installment debt,such as car loans, student loans, credit card debt, and so on, from 36% of total monthly gross income. The smaller of the affordable monthly mortgage payment and the totalaffordable monthly debt payments is the affordable monthly mortgage. To calculate the maximum that can be borrowed, find the monthly payment per $1,000 mortgage based on thecurrent interest rate and duration of the loan. Divide the affordable monthly mortgage amount by this monthly payment to find the affordable mortgage. Assuming a 10% downpayment, the maximum price of a house would be the affordable mortgage divided by 0.9. Use the following data to test your model:Total monthly gross income = $6,000Nonmortgage housing expenses $300Monthly installment debt = $400Monthly payment per $1,000 mortgage = $7.25A1 Total Monthly Gross Income2 Allowable Monthly Housing Expenditure3 Total Non-Mortgage Housing Expenses4 Affordable Monthly Mortgage Payment5 Monthly Installment Debt6 Total Affordable Monthly Debt Payments7 Affordable Monthly Mortgage8 Monthly Payment per $1000 mortgage9 Maximum that can be borrowed10 Down Payment11 What one can afford to spend on a houseB$6,000.00▼$300.00▼$400.00▼▼$7.2510%CMax PercentageMax PercentageD0.280.36

1. If we talk about allowable monthly housing expenditure then this value can be find out by…

Allowable Monthly Housing Expenditure otal Non-Mortgage Housing Expenses Affordable Monthly Mortgage Payment Monthly Installment Debt otal Affordable Monthly Debt Payments affordable Monthly Mortgage Monthly Payment per $1000 mortgage Maximum that can be borrowed Down Payment What one can afford to spend on a house $300.00 $400.00 $7.25 10% Max Percentage 0.28 Max Percentage 0.36

Allowable Monthly Housing Expenditure otal Non-Mortgage Housing Expenses Affordable Monthly Mortgage Payment Monthly Installment Debt otal Affordable Monthly Debt Payments affordable Monthly Mortgage Monthly Payment per $1000 mortgage Maximum that can be borrowed Down Payment What one can afford to spend on a house $300.00 $400.00 $7.25 10% Max Percentage 0.28 Max Percentage 0.36

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter5: Business And Economic Forecasting

Section: Chapter Questions

Problem 1E: The forecasting staff for the Prizer Corporation has developed a model to predict sales of its...

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