Question

# You can afford a \$1500 per month mortgage payment. You've found a 30 year fixed loan...

You can afford a \$1500 per month mortgage payment. You've found a 30 year fixed loan at 7.3% interest.
Round all answers to the nearest cent as needed.

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? \$

Using the following conversions between the metric and U.S. systems, convert the measurement.

1 meter ≈≈ 3.28 feet
1 Liter ≈≈ 0.26 gallons
1 kilogram ≈≈ 2.20 pounds

19.621 yd ≈≈  km

Using the following conversions between the metric and U.S. systems, convert the measurement.

1 meter ≈≈ 3.28 feet
1 Liter ≈≈ 0.26 gallons
1 kilogram ≈≈ 2.20 pounds

16.595 fl oz ≈≈  cL

Given,

Monthly payment = \$1500

Term = 30 years

Interest rate = 7.3% or 0.073

Solution :-

Monthly rate (r) = 0.073/12 = 0.00608333333

Number of months (n) = 30 years x 12 = 360 months

Now,

(a)

Loan amount = Monthly payment/r x [1 - (1 + r)-n]

= \$1500/0.00608333333 x [1 - (1 + 0.00608333333)-360]

= \$1500/0.00608333333 x [1 - (1.00608333333)-360]

= \$1500/0.00608333333 x [1 - 0.11266171292926]

= \$1500/0.00608333333 x 0.88733828707074 = \$218795.74

(b)

Total money paid = Monthly payment x number of months

= \$1500 x 360 months = \$540000

(c)

Total interest = Total money paid - Loan amount

= \$540000 - \$218795.74 = \$321204.26

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