Chapter 13.4, Problem 19E

### Algebra and Trigonometry (MindTap ...

4th Edition
James Stewart + 2 others
ISBN: 9781305071742

Chapter
Section

### Algebra and Trigonometry (MindTap ...

4th Edition
James Stewart + 2 others
ISBN: 9781305071742
Textbook Problem

# APPLICATIONSMortgage Dr. Gupta is considering a 30 - y e a r mortgage at 6 % interest. She can make payments of $3500 a month. What size loan can she afford? To determine To find: The size of loan that Dr. Gupta can afford, considering a 30-year mortgage at 6% interest with a payment of$3500 a month.

Explanation

Given:

The interest per year is,

i=6%

Number of years is,

n=30

The payment R is,

R=\$3500

Approach:

The loan can be considered as an annuity whose present value, Ap (size of the loan) is given by the formula for present value of an annuity consisting of n regular payments of size R and interest rate i per time period; that is,

Ap=R1(1+i)ni ... (1)

Calculation:

The number of regular payments is given by,

n=30×12=360

The interest per year is given by,

### Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

#### The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started