Posted by Anonymous on Monday, May 2, 2011 at 1:03pm.
A couple purchasing a home budget $1700 per month for their loan payment. If they have $15,000 available for a down payment and are considering a 25year loan, how much can they spend on the home at each of the following rates? (Round your answers to the nearest cent.)
(a) 6.9% compounded monthly
$ 1
(b) 7.1% compounded monthly
$ 2

math plz help me  MathMate, Monday, May 2, 2011 at 4:45pm
The $15,000 can be added at the end to the total purchase price, but does not affect the mortgage calculations.
The formula for the mortgage calculations is:
P(1+i)^n = R((1+i)^n1)/i
where
i=interest rate per period (month)
n=number of periods (months)
R=monthly payment
P=amount to borrow
(a) at 6.9% p.a.,
i=0.069/12=0.00575
n=12*25 years = 300 months
R=$1700 = monthly payment
Solve for P
P=R((1.00575)^3001)/(0.00575*(1.00575^300))
=$242714.03
Add the downpayment of $15000 to get
$257,714.03 for the total purchase price.
I'll leave (b) for your exercise.
Answer This Question
Related Questions
 math  A couple purchasing a home budget $1700 per month for their loan payment...
 algebra  How would you solve this math equation? this is really confusing to me...
 MATH  In order to make some home improvements, a home owner spent $24,000. He ...
 Math  4. Vanna has just financed the purchase of a home for $200 000. She ...
 Finance  subject is purchasing a home for $45,00.00 with $5,000.00 down payment...
 Math  4. Find the monthly payment for the loan. (Round your answer to the ...
 Finance  You are considering borrowing $150,000 to purchase a new home. a. ...
 FINANCE  CORRECTION TO AMOUNT WITH PRIOR QUESTION:subject is purchasing a home ...
 Math  Shantle and Kwamie are planning to buy their first home. Although they ...
 math  Wallace and Sarah purchased furniture for their new home. They had two ...
More Related Questions