For Mortgage,
Monthly Payment = 4600
Mortgage Rate = 2.52%
Time Period = 15 years
In mortgage loan,
Period is monthly and payment is done monthly, and future value = 0,
a.
Present Value = Loan Amount that can be afforded on given monthly payment,
Calculating Present Value,
Using TVM Calculation,
PV = [FV = 0, PMT = 600, T = 180, I = 0.0252/12]
PV = $89,856.53
So,
Mortgage Amount that can be afforded today = $89,857
b.
If Down payment = 20%(cash paid on initiation of mortgage)
80% of the loan is the present value of mortgage calculated in Part(a)
Total Loan Amount = 89,856.53/(0.80)
Loan Amount = $112,321
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You can afford monthly payments of S 00 i current mortgage rates are 2 52% for...
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