Question

You can afford a $1350 per month mortgage payment. You've found a 30 year loan at 8% interest.

a) How big of a loan can you afford?

$

b) How much total money will you pay the loan company?

$

c) How much of that money is interest?

$

Answer 1

a)	P =	Regular Payments
	PV =	Loan Amount
	r =	rate of interest
	n =	no of periods
	P =	r (PV)
		1 - (1 + r )-n
	1350 =	(8%/12)*PV
		1 - (1 / (1 + 8%/12)^360))
	1350 =	0.00666666666666667 * PV
		0.908556628
	PV =	1350 * 0.908556627559753 / 0.00666666666666667
	PV =	183982.72
b)	Total Money Payment =	EMI * No of Payment
		1350 * 360
		486000
c)	Interest =	Total Payments - Loan
		486000 - 183982.72
		302017.28