The Johnsons have accumulated a nest egg1 of $40,000 that they intend to use as a down payment toward the purchase of a new house. Because their present gross income has placed them in a relatively high tax bracket, they have decided to invest a minimum of $2400/month in monthly payments toward the purchase of their house. However, because of other financial obligations, their monthly payments should not exceed $3000. If local mortgage rates are 5.5%/year compounded monthly for a conventional 30-year mortgage, what is the price range of houses that they should consider? 1A nest egg is a substantial sum of money or other assets that have been saved or invested for a specific purpose.
The Johnsons have accumulated a nest egg1
of $40,000 that they intend to use as a down payment toward the
purchase of a new house. Because their present gross income has placed them in a relatively high tax bracket, they
have decided to invest a minimum of $2400/month in monthly payments toward the purchase of their house.
However, because of other financial obligations, their monthly payments should not exceed $3000. If local
mortgage rates are 5.5%/year compounded monthly for a conventional 30-year mortgage, what is the price range
of houses that they should consider?
1A nest egg is a substantial sum of money or other assets that have been saved or invested for a specific purpose.
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