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 most money she can borrow is $48478.7

Explanation:

We are given

Kylie can afford a $1310-per-month house loan payment

so,

PMI=1310

t=25 years

n=12

APR=8.4%=0.084

So,

total money =(PMI)*t*n

`A=1310* 12* 25`

`A=393000`

now, we can use formula

`A=P(1+(r)/(n))^(nt)`

we can plug values

`393000=P(1+(0.084)/(12))^(12* 25)`

now, we can solve for P

so, we get

`P=(393000* \:12^(300))/(12.084^(300))`

`P=48478.7`

So,

The most money she can borrow is $48478.7