math

posted by .

The Johnsons have accumulated a nest egg of $19,000 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 $1300/month in monthly payments (to take advantage of the tax deduction) toward the purchase of their house. However, because of other financial obligations, their monthly payments should not exceed $1600. If local mortgage rates are 8.5%/year compounded monthly for a conventional 30-yr mortgage, what is the price range of houses they should consider?

  • math -

    R = the periodic payment
    P = the amount borrowed
    n = the number of payments and i = the periodic interest in decimal form.

    The monthly payment, R, required to retire the debt of $P over a period of n = 30(12) = 360 months at the monthly interest rate of i = 8.5/(100(12)) = .0070833 derives from

    R = Pi/[1-(1+i)^(-n)]

    Solve for P.

Respond to this Question

First Name
School Subject
Your Answer

Similar Questions

  1. economics cost analysis

    The XYZ corporation is planning to purchase an extruder at a purchase price of $350,000. XYZ plans to make down payment of 25% of the first cost of the extruder and to make a 7 year,10% yearly payment loan for the rest of the first …
  2. Math

    Johnsons accumulated a nest egg of $40,000 to use as down payment toward a new home. Present gross income has them in high tax bracket, decided to invest min $2400/month in payments (for tax break). Financial obligations cannot exceed …
  3. Math

    Johnsons accumulated a nest egg of $40,000 to use as down payment toward a new home. Present gross income has them in high tax bracket, decided to invest min $2400/month in payments (for tax break). Financial obligations cannot exceed …
  4. Math

    The Johnsons have accumulated a nest egg of $27,000 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 …
  5. Math 134

    A single person could expect to pay $4,760 in income taxes on an adjusted gross income of $34,000 how much more tax should the person expect to pay if her adjusted gross income increased by $2,000, knowing that this owuld not move …
  6. Math 134

    Sorry to bother those who are helping me but I simply just do not understand and really need help. A single person could expect to pay $5220 in income taxes with an adjusted income gross of $29,000. If my adjusted gross increases to …
  7. Math college level

    Sorry to bother those who are helping me but I simply just do not understand and really need help. A single person could expect to pay $5220 in income taxes with an adjusted income gross of $29,000. If my adjusted gross increases to …
  8. algebra

    in a recent year a single person could expect to pay 4160 in income taxes on an adjusted gross income of 26,000. how much more tax should the person expect to pay if her adjusted gross income increased by 4,000 knowing that this would …
  9. Consumer Math

    Could someone help me answer these!? I feel like no one else will help, and my teachers aren't really any help either. 1) a) You purchase a new car for $16,725.00 plus 6.15% sales tax. The down payment is $1,400.00 and you have an
  10. Business Math

    A newly couple has $15,000 toward the purchase of a house. For the type and size of house the couple is interested in buying, an estimated down payment of $20,000 will be necessary. How long will the money have to be invested at 10% …

More Similar Questions