Question

In: Finance

Youcurrently pay $950 per month in rent and would not be comfortablepaying more than...

You currently pay $950 per month in rent and would not be comfortable paying more than this for housing. How much money could you borrow to buy a house, assuming a 30-year loan term and a prevailing annual interest rate of 4.65%?

Solutions

Expert Solution

Loan Amount = Present value of monthly payment discounted at a monthly rate.

Monthly Amount = 950

Monthly Rate = 4.65/12% = 0.3875%

Number of payments = 12*30 = 360

Loan Amount = 950/(1+0.003875)^1 + 950/(1+0.003875)^2 +950/(1+0.003875)^3 +950/(1+0.003875)^4 +950/(1+0.003875)^5 +950/(1+0.003875)^6 +950/(1+0.003875)^7 +950/(1+0.003875)^8 +............+ 950/(1+0.003875)^360

Loan Amount = 184238.20 Answer

jeff jeffy answered 3 years ago
Next > < Previous

Related Solutions

Location Square Footage Rent per Month Location Square Footage Rent per Month Queens 500 650 Nassau...
Location Square Footage Rent per Month Location Square Footage Rent per Month Queens 500 650 Nassau County 1100 1875 Queens 588 1215 Nassau County 588 1075 Queens 1000 2000 Nassau County 1250 1775 Queens 688 1655 Nassau County 556 1050 Queens 825 1250 Nassau County 825 1300 Queens 460 1805 Nassau County 743 1475 Queens 1259 2700 Nassau County 660 1315 Queens 650 1200 Nassau County 975 1400 Queens 560 1250 Nassau County 1429 1900 Queens 1073 2350 Nassau County...
Samantha enters a rent-to-own agreement for living room furniture. She will pay $ 70$70 per month...
Samantha enters a rent-to-own agreement for living room furniture. She will pay $ 70$70 per month for one year. Which of the following shows the timeline for her payments if the first payment is one month from now? A. Date (Months) 0 1 2 3 4 5 6 7 8 9 10 11 12 Cash Flows 0 negative $ 70−$70 negative $ 70−$70 negative $ 70−$70 negative $ 70−$70 negative $ 70−$70 negative $ 70−$70 negative $ 70−$70 negative $...
You rent out an apartment for 15 years, with rent starting at $500 per month and...
You rent out an apartment for 15 years, with rent starting at $500 per month and increasing 3% each year. Immediately after receiving rent payments you deposit the rent payment into an account with i(12) = .06. If there are no other deposits or withdrawals into this account then how much is in the account after the 15 year period?
The cost of living in Bangladesh is $40 per month for rent and food per adult...
The cost of living in Bangladesh is $40 per month for rent and food per adult is $13 per month .Milk for a child is $5 per month. Those who work in the factories are generally the main wage earners in their families because no other jobs pay as well. where do you see some fixes for the safety and wage issues? What needs to be done besides institution codes of ethics and factory and labor standards?
A buyer can afford no more than $500 per month in payments. The most favorable loan...
A buyer can afford no more than $500 per month in payments. The most favorable loan available in the market is a 30 year loan at 9%. What is the maximum affordable house with a 20% down payment?
The average rent in a city is $1500 per month with a standard deviation of $250....
The average rent in a city is $1500 per month with a standard deviation of $250. Assume rent follows the normal distribution. Use the empirical rule to answer the following questions. a. what percentage of rents are between 1250 and 1750? b. what percentage of rents are less than 1250? c. what percentage of rents are greater than 2000?
The average rent in a city is $1,440 per month with a standard deviation of $340....
The average rent in a city is $1,440 per month with a standard deviation of $340. Assume rent follows the normal distribution. a. What percentage of rents are between $760 and $2,120? What percentage of rents are less than $760? c. What percentage of rents are greater than $2,460?
The average rent in a city is $1,440 per month with a standard deviation of $340....
The average rent in a city is $1,440 per month with a standard deviation of $340. Assume rent follows the normal distribution. a. What percentage of rents are between $760 and $2,120? What percentage of rents are less than $760? c. What percentage of rents are greater than $2,460?
Assume a lease for a condo asks for rent of $2,500 per month, paid at the...
Assume a lease for a condo asks for rent of $2,500 per month, paid at the start of each month, and rent is set to increase by 3% every year. Furthermore, assume the current purchase price of that same condo is $500,000, with maintenance fees & taxes currently at $10,000 per year, and increasing annually at a rate of 4%, where fees & taxes are paid at the end of each year. Finally, let the applicable nominal annual interest rate...
A college graduate earns about $1,500 per month more than someone that only has a high...
A college graduate earns about $1,500 per month more than someone that only has a high school diploma. If a “working life” starts next month and lasts 45 years, how much is a college degree worth today if market interest rates are 3.91% APR, compounded monthly?
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT