If you can afford a $200 monthly payment for a loan of 6% interest for 4 years, the loan's present value can be as big as $8,500.
How the present value is determined:
We can determine the present value using an online finance calculator as follows:
N (# of periods) = 48 months (4 years x 12)
I/Y (Interest per year) = 6%
PMT (Periodic Payment) = $200
FV (Future Value) = $0
Results:
PV = $8,500
Sum of all periodic payments = $9,600
Total Interest = $1,100
Thus, you can afford a loan of $8,500 with the monthly payment for 4 years.