Answer: $31,920.
Explanation:
The banker's rule is a method used by lenders to determine the maximum amount of money that a borrower can afford to repay. According to this rule, the maximum amount of money that Lee can afford to borrow is determined by multiplying his annual income by a factor of 0.28.
Using this rule, the amount that Lee can afford to borrow can be calculated as:
Maximum affordable monthly payment = 0.28 x monthly income
Maximum affordable monthly payment = 0.28 x (24700/12)
Maximum affordable monthly payment = 0.28 x 2058.33
Maximum affordable monthly payment = 576.66
Therefore, Lee can afford to make monthly payments of up to $576.66. To calculate the total amount he can borrow, we need to determine the total cost of the loan, including principal and interest.
Assuming a 5-year loan with an interest rate of 4%, the total cost of the loan can be calculated using an online loan calculator or spreadsheet software.
Plugging in the numbers, the total amount that Lee can borrow is approximately $31,920.
It's important to note that this calculation is based on the banker's rule and assumes that Lee has no other debt obligations. Actual loan approval and loan amounts may vary depending on other factors such as credit score, debt-to-income ratio, and other lender-specific requirements.