Suppose you have graduated from college and want to purchase a house. Your take-home pay is $4560 per month and you wish to stay within the recommended guidelines for mortgage amounts by only spending 1 4 of your take-home pay on a house payment. You have $18,500 saved for a down payment. With your good credit and the down payment you can get an APR from your bank of 4.35%, compounded monthly. a. What is the total cost of a house you could afford with a 15-year mortgage? b. What is the most that you could afford with a traditional 30-year mortgage instead of a 15-year?
Suppose you have graduated from college and want to purchase a house. Your take-home pay is $4560 per month and you wish to stay within the recommended guidelines for mortgage amounts by only spending 1 4 of your take-home pay on a house payment. You have $18,500 saved for a down payment. With your good credit and the down payment you can get an APR from your bank of 4.35%, compounded monthly. a. What is the total cost of a house you could afford with a 15-year mortgage? b. What is the most that you could afford with a traditional 30-year mortgage instead of a 15-year?
Chapter4: Time Value Of Money
Section: Chapter Questions
Problem 25PROB
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Suppose you have graduated from college and want to purchase a house. Your take-home pay
is $4560 per month and you wish to stay within the recommended guidelines for mortgage
amounts by only spending 1
4 of your take-home pay on a house payment. You have $18,500
saved for a down payment. With your good credit and the down payment you can get an APR
from your bank of 4.35%, compounded monthly.
a. What is the total cost of a house you could afford with a 15-year mortgage?
b. What is the most that you could afford with a traditional 30-year mortgage instead of
a 15-year?
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