se price of the house, and you are looking at a 20 year loan at 6.12% interest compounded monthly. Your financial planner has advised you that your mortgage

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 15P
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Let's say that you are planning to purchase a house. You have $32,000 set aside as a down payment towards teh purchase price of the house, and you are looking at a 20 year loan at 6.12% interest compounded monthly. Your financial planner has advised you that your mortgage payments for the year should not exceed 20% of your take-home pay. If your yearly take-home pay is $24,000, then find the maximum price of the house that you could purchase (while following the advice of your financial planner). Do not use TVM solver.

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