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3. The most I can afford to pay for my mortgage payment is $950 a month. The bank is offering a 20 year mortgage with an APR of 4.3%. How expensive of a house can I afford?

3. The most I can afford to pay for my mortgage payment is $950 a month. The bank is offering a 20 year mortgage with an APR of 4.3%. How expensive of a house can I afford?

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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3. The most I can afford to pay for my mortgage payment is $950 a month. The bank is offering a 20 year mortgage with an APR of 4.3%. How expensive of a house can I afford? 4. You want to buy a $20,000 car. The most you can afford is $450 a month. The bank offers 3 choices for a loan: 4 years with 7% APR, 5 year with 7.5% APR, or a 6 year loan with 8% APR. Which option best serves your needs if you want to pay the least amount of interest? 5. Suppose you have graduated from college and want to purchase a home. Your take-home salary is $4560 a month, and you wish to stay within the recommended guidelines for mortgage amounts by only spending % of your monthly take home pay on a house payment. You have $18,500 saved for a downpayment. With good credit, you can get a 15 year mortgage with a 4.35% APR. a. What is the total cost of the house you could afford? b. If this switched to a 30 year mortgage, what is the most you could afford to purchase?
Transcribed Image Text:3. The most I can afford to pay for my mortgage payment is $950 a month. The bank is offering a 20 year mortgage with an APR of 4.3%. How expensive of a house can I afford? 4. You want to buy a $20,000 car. The most you can afford is $450 a month. The bank offers 3 choices for a loan: 4 years with 7% APR, 5 year with 7.5% APR, or a 6 year loan with 8% APR. Which option best serves your needs if you want to pay the least amount of interest? 5. Suppose you have graduated from college and want to purchase a home. Your take-home salary is $4560 a month, and you wish to stay within the recommended guidelines for mortgage amounts by only spending % of your monthly take home pay on a house payment. You have $18,500 saved for a downpayment. With good credit, you can get a 15 year mortgage with a 4.35% APR. a. What is the total cost of the house you could afford? b. If this switched to a 30 year mortgage, what is the most you could afford to purchase?
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