Question

14. You can afford a $1,100 per month mortgage payment. You've found a 30-year loan at 3.45% interest.(a) How big of a loan can you afford? $(b) How much total money will you pay the bank? $(c) How much of that money is interest? $

Answer 1

One can afford $1,100 per month mortgage payment and one has found a 30-year loan at 3.45% interest.

`1100\text{ x 12 x 30 = \$396,000 }`

(a)

`\begin{gathered} \frac{P\text{ x 3.45 x 30}}{100}\text{ + p = 396,000} \\ P(1.035)\text{ + p = 396,000} \\ p\text{ (1.035 + 1) = 396000} \\ P(2.035)\text{ = 396000} \\ P\text{ = \$ }(396000)/(2.035) \\ P\text{ = \$194594.6} \end{gathered}`

(b) The total money he would be paying

`\text{ \$ 396,000}`

(c) $The amount of the money that is interest i;

`\text{\$396,000 - \$194594.6 = \$201405.4}`