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Can you please help me figure out this math problem?
- Thread starter shayshay
- Start date
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A couple interested in buying a home determines that they can afford a monthly mortgage payment of $800. Can they afford to buy a home with a 30 year, $110,000 mortgage at 8% interest?
Hint:
Calculate the monthly payment for the conditions given. What have you been taught about that in your class?
This is the second problem you have posted - without showing a line of work. You have not indicated whether you have solved the first problem or not!!
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Hello, shayshay!
You need the Amortization Formula:. \(\displaystyle A \;=\; P\dfrac{i(1+i)^n}{(1+i)^n-1}\)
. . where: .\(\displaystyle \begin{Bmatrix}A &=& \text{periodic payment} \\ P &=& \text{principal borrowed} \\ i &=& \text{periodic interest rate} \\ n &=& \text{number of periods} \end{Bmatrix}\)
You have: .\(\displaystyle P = 110,\!000,\;i = \dfrac{0.08}{12},\;n = 360\)
. . Plug in those values.
[The answer is NO: .\(\displaystyle A \:\approx\:\$807.14\)]
A couple interested in buying a home determines that they can afford a monthly mortgage payment of $800.
Can they afford to buy a home with a 30-year, $110,000 mortgage at 8% interest?
You need the Amortization Formula:. \(\displaystyle A \;=\; P\dfrac{i(1+i)^n}{(1+i)^n-1}\)
. . where: .\(\displaystyle \begin{Bmatrix}A &=& \text{periodic payment} \\ P &=& \text{principal borrowed} \\ i &=& \text{periodic interest rate} \\ n &=& \text{number of periods} \end{Bmatrix}\)
You have: .\(\displaystyle P = 110,\!000,\;i = \dfrac{0.08}{12},\;n = 360\)
. . Plug in those values.
[The answer is NO: .\(\displaystyle A \:\approx\:\$807.14\)]