Question

Kylie can afford a $1310-per-month house loan payment. If she is being

offered a 25-year house loan with an APR of 8.4%, compounded monthly,
which of these expressions represents the most money she can borrow?​

Answer 1

The is ($1310)((1+0.007)^300-1)/(0.007)(1+0.007)^300

Explanation:

Answer 2

The amount which she borrow as house loan is $ 48514.56

Explanation:

Given as :

The house loan per month afford by Kylie = $1310

The period of loan = 25 Years

The annual rate compounded monthly = 8.4%

Principal = $ P

∵ The per month loan afford amount = $1310

So, The amount afford in 25 years = $1310 × 25 × 12

Or, The amount afford in 25 years = $393,000

Now, from compounded method :

Amount = Principal ×
`(1+(Rate)/(12* 100))^(12* Time)`

Or, $393,000 = $ P ×
`(1+(8.4)/(12* 100))^(12* 25)`

Or, $393,000 = $ P ×
`(1.007)^(300)`

Or, $393,000 = $ P ×
`(393,000)/(8.10066)`

∴ P = $ 48514.56

Hence The amount which she borrow as house loan is $ 48514.56 Answer