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Jadyn is looking to purchase a home for 200,000 and will make a down payment of35,000. Jadyn's bank is offering a monthly interest rate of 0.351

User ElaRosca
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1 Answer

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Final answer:

To calculate the maximum loan Joanna can afford, we can use the present value formula: Loan amount = Annual payment / (1 + interest rate)^(number of years). Given that Joanna can afford to pay $12,000 a year for 30 years and the interest rate is 4.2% annually, the maximum loan Joanna can afford is approximately $190,876.38. She will end up paying a total of $360,000 over the course of 30 years.

Step-by-step explanation:

To calculate the maximum loan Joanna can afford, we can use the present value formula:



Loan amount = Annual payment / (1 + interest rate)^(number of years)}



Given that Joanna can afford to pay $12,000 a year for 30 years and the interest rate is 4.2% annually, we can substitute these values into the formula:



Loan amount = $12,000 / (1 + 0.042)^30



Calculating this, we find that the maximum loan Joanna can afford is approximately $190,876.38.



To find out what she ends up paying after 30 years, we can multiply the annual payment by the number of years:



Total payment = Annual payment * number of years = $12,000 * 30 = $360,000



So Joanna will end up paying a total of $360,000 over the course of 30 years.

User Jeshua Lacock
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