Question

**Please show the below problem in Excel:**

John and Peggy would like to buy a house. They

have looked at their budget and determined that

they can afford a maximum monthly mortgage

payment of $1,100. Interest rates on 30-year,

fixed-rate mortgages currently have a nominal

annual interest rate of 7 percent with monthly

compounding (payments due at the end of each

month). Given these loan terms, what is the

maximum amount John and Peggy borrow today

to purchase a house and not exceed a monthly

payment of $1,100 on the loan? Round to the

nearest dollar.

Select one:

a. $15,714

b. $165,338

c. $127,128

d. $157,143

Answer #1

**We can use the present value of the annuity to find the
answer.**

Where,

PVA = Present value of the annuity

A = Annuity or monthly payment

i = Interest rate in decimal form (i.e 7% = 0.07)

n = Number of years

a = Number of payments in a year

Therefore,

**Therefore, the correct answer is b.
$165,338**

John and Peggy recently bought a house. They financed the house
with a $125,000, 30-year mortgage with a nominal interest rate of 7
percent. Mortgage payments are made at the end of each month. What
total dollar amount of their mortgage payments during the first
three years will go towards repayment of principal?

Aya and Harumi would like to buy a house and their dream house
costs $500,000. They have $50,000 saved up for a down payment but
would still need to take out a mortgage loan for the remaining
$450,000 and they’re not sure whether they could afford the monthly
loan payments. The bank has offered them an interest rate of 4.25%,
compounded monthly. How much would they have to be able to afford
to pay each month in order to pay...

1.)
You
want to buy a house in Hermosa Beach CA, but you can only afford to
make monthly payments of $7,100. The interest rate on mortgages
right now is 4.25% p.a. with monthly compounding (APR), fixed for
30 years, with monthly payments. You have $155,000 saved to use as
a downpayment. What is the most that you can afford to pay for a
house (ignoring closing costs, property taxes, etc..)?
Answer: $1,598,265.76
2.)
Under
the same assumptions described in...

Estimate the maximum house value you can afford to buy. Assume
the mortgage is fixed rate, 30-year maturity, 80% LTV, with no
points. The interest rate is quoted is 3.5% with monthly payments.
The property tax rate in the city is 0.7% per year based on
property value; the hazard insurance premium is 0.5% per year based
on property value, and that on average you should consider $50 per
month for maintenance. Determine the required monthly payment for
the mortgage...

You would like to buy a house that costs $ 350,000. You have
$50,000 in cash that you can put down on the house, but you need
to borrow the rest of the purchase price. The bank is offering you
a 30-year mortgage that requires annual payments and has an
interest rate of 9% per year. You can afford to pay only $28,320
per year. The bank agrees to allow you to pay this amount each
year, yet still borrow...

You would like to buy a house that costs
$350,000.
You have
$50,000
in cash that you can put down on the house, but you need to
borrow the rest of the purchase price. The bank is offering you a
30-year mortgage that requires annual payments and has an interest
rate of
7%
per year. You can afford to pay only
$22,970
per year. The bank agrees to allow you to pay this amount each
year, yet still borrow
$300,000....

Sam and Jenny have been married for one year, and are planning
to buy a house in Sydney for $1 million. They will borrow $700,000
from a bank. The interest rate on the loan is 3.60% per annum,
compounding monthly. The loan is for 30 years, and they have to
make monthly repayments to the bank, the first payment being
exactly one month from today. What is the amount of the monthly
repayment?
Select one:
a. $3,303.78
b. $4,546.45
c....

You borrow $185,000 to buy a house. The mortgage interest rate
is 7.5 percent and the loan period is 30 years. Payments are made
monthly. What is your monthly mortgage payment?
$1,293.55
$953.70
$1,083.78
$1,153.70
$1,398.43

Suppose you have decided to buy a house. The mortgage is a
30-year mortgage with an interest rate of 7%, compounded monthly.
You borrow a total of $250,000. Given this, by the time you pay off
the loan, how much in total (interest + principal) would the house
cost you?

You want to buy a house and will need to borrow $250,000. The
interest rate on your loan is 5.83 percent compounded monthly and
the loan is for 20 years. What are your monthly mortgage
payments?

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 4 minutes ago

asked 21 minutes ago

asked 40 minutes ago

asked 40 minutes ago

asked 43 minutes ago

asked 43 minutes ago

asked 44 minutes ago

asked 53 minutes ago

asked 54 minutes ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago