Question

You find that the going rate for a home mortgage with a term of 30 years is 7% APR. The lending agency says that based on your income, your monthly payment can be a most 730. How much can you borrow you borrow? (Round your answer to the nearest cent

Answer 1

Given:

Monthly payment 730.

`\begin{gathered} r=(7)/(100*12) \\ r=(0.07)/(12) \end{gathered}`
`\begin{gathered} t=30*12 \\ t=360 \end{gathered}`
`\text{Amount borrowed=}Monthly\text{ payment}*(\lbrack(1+r)^t-1\rbrack)/((1+r)^t* r)`
`\text{Amount borrowed}=730*(((12.07)/(12))^(360)-1)/(((12.07)/(12))^(360)((0.07)/(12)))`
`\text{Amount borrowed}=730*(7.0202)/(0.04678)`
`\text{Amount borrowed}=730*150.0684`
`\text{Amount borrowed}=\text{ \$109549.93}`
`\text{Amount borrowed}=10954993\text{ cent}`