Milo can afford a $900 monthly mortgage payment. if the current mortgage rates are 5% and he wants a 30-year mortgage, what is the maximum amount he can afford to borrow?

Approximately $167,653. First, you compute the number of periods as 30 years multiplied by 12 months to get 360 monthly periods. Next, you compute the monthly mortgage rate as 5% divided by 12, or roughly 0.42%. Then, using a payment of $900 monthly, 0.42% for the interest rate, future value of $0, and 360 monthly periods, you compute the present value (PV) as $167,653.