Previous Problem
Problem List
Next Problem
(6 points)
Your brother is considering the purchase of a home rather than renewing the lease on his two-bedroom apartment. He is
currently paying $1150 per month for rent. He has asked you to help decide what sort of home he might be able to afford
with his current monthly rent payment. His bank offers first-time home buyers (with good credit) a 25-year mortgage at a
fixed rate of 8.2%. Use this information to answer the questions below.
Express your answers rounded correctly to the nearest cent!
() If the cost of insurance and property taxes is about $190 per month in the neighborhood where he'd like to live, what
monthly mortgage payment can he afford? (Refer to your class notes for the formula.)
Payment = $
(II) Use Excel's PV function to determine how much your sister could afford to borrow for a home.
Amount to Borrow = $
Note: You can earn partial credit on this problem,
Preview My Answers
Submit Answers
You have attempted this problem 0 times. You have 5 attempts left before new version will be requested.