What amount could you borrow at 6.6% compounded monthly if you can afford to make monthly...

Question

Question

What amount could you borrow at 6.6% compounded monthly if you can afford to make monthly payments of $775 for 25 years? O $2

Answer 1

Answer #1

Rate = 6.6% / 12 = 0.55%

Number of periods = 25 * 12 = 300

Amount borrowed = Payments * [1 - 1/ (1 + r)^n] / r

Amount borrowed = 775 * [1 - 1/ (1 + 0.0055)^300] / 0.0055

Amount borrowed = 775 * [1 - 0.19292] / 0.0055

Amount borrowed = 775 * 146.741797

Amount borrowed = $113,725

Add a comment

Answer 2

Similar Homework Help Questions

James wants to take out a loan. He can afford to make monthly payments of 100...

James wants to take out a loan. He can afford to make monthly payments of 100 dollars and wants to pay the loan off after exactly 30 years. What is the maximum amount that James can afford to borrow if the bank charges interest at an annual rate of 8 percent, compounded monthly? (Give your answer, in dollars, correct to the nearest dollar.) Nicola borrows 60000 dollars from a bank that charges interest at an annual rate of 10 percent,...
dont look at my writing. 203000 manthly peyment . We cas afford to make payments of $300 per month for our years. We can get a loan at an APe of4% How much money can we afford to borrow? Mai...

dont look at my writing. 203000 manthly peyment . We cas afford to make payments of $300 per month for our years. We can get a loan at an APe of4% How much money can we afford to borrow? Mailings Review View AaBbCcDdEe AaBbCcDdEe AaBbCcD AaBbCo Normal No Spacing Heading1 Headi d improvements, choose Check for Updates. 7. Suppose we invest $10,000 in a texear certificate of deposit that pays an apr of 6% a. find the value of the...
You can afford monthly payments of $200 into an account that pays 3.3% compounded monthly. How...

You can afford monthly payments of $200 into an account that pays 3.3% compounded monthly. How long will it be until you have $12,000 to buy a boat?

You are looking to buy a car. You can afford $730 in monthly payments for five...

You are looking to buy a car. You can afford $730 in monthly payments for five years. In addition to the loan, you can make a $830 down payment. If interest rates are 10.00 percent APR, what price of car can you afford (loan plus down payment)? (Do not round Intermediate calculations and round your final answer to 2 decimal places.) Present value To borrow $3,700, you are offered an add-on interest loan at 9.3 percent with 12 monthly payments....
You can afford car payments of $180 a month for five years. The interest rate is...

You can afford car payments of $180 a month for five years. The interest rate is 3.9 percent, compounded monthly. How much can you afford to borrow to buy a car? - $7,987.81 -$8,294.39 -$9,773.83 $9,797.82
Question 5 10 pts You borrow $400,000 at a rate of 5% per year compounded monthly...

Question 5 10 pts You borrow $400,000 at a rate of 5% per year compounded monthly and make monthly payments for 2 years to repay the loan. What Excel function can be used to calculate the loan payment amount? =PMT((5/12)%, 240, -400000) =PMT(5%, 20, -400000) =PMT((5/12)%, 24,-400000) =PMT(5%, 240, 400000)

Walt can afford monthly car payments of $140 for 3 years, starting 1 month from now....

Walt can afford monthly car payments of $140 for 3 years, starting 1 month from now. The interest rate is 4.6 percent, compounded monthly. How much can he afford to borrow to buy a car? Multiple Choice $4,961.36 $4,717.32 $4,533.80 $5,333.88 $4,699.31
When you borrow money to buy a house or a car, you pay off the loan...

When you borrow money to buy a house or a car, you pay off the loan in monthly payments, but the interest is always accruing on the outstanding balance. This makes the determination of your monthly payme on a loan more complicated than you might expect. If you borrow P dollars at a monthly interest rate ofras decimal) and wish to pay off the note in months, then your monthly payment M = M(Prt) in dollars can be calculated using...
9) Sue can afford $500 a month for 3 years for a car loan. If the interest rate is 4 percent compounded monthly, how much can he afford today to borrow to purchase a car? (NOTE: show results and show...

9) Sue can afford $500 a month for 3 years for a car loan. If the interest rate is 4 percent compounded monthly, how much can he afford today to borrow to purchase a car? (NOTE: show results and show calculations used in financial calculator-which formula and the inputs into TVM Solve/Grid below) In Finance calculator- TVM Solver- show your inputs and then output Page 519 Values Entered (inputs) END PMT: END or BGN PV P/N PMT FV Solve for...

You are looking to buy a car. You can afford $520 in monthly payments for four...

You are looking to buy a car. You can afford $520 in monthly payments for four years. In addition to the loan, you can make a $1,700 down payment. If interest rates are 8.75 percent APR, what price of car can you afford (loan plus down payment)?