Question

PLEASE HELPPPPPJohn and Kathy are shopping for their first home. Between the two of them, they feel they can afford a $1400 monthly house payment. The bank has already preapproved them for a 30-year loan with 5.4% interest. What is the maximum house price John and Kathy can afford?

Answer 1

Answer: $249,300

Step-by-step explanation:

The exact formula would be if I think this is right

PV = PMT(1-(1+r)^-n)/r with r & n adjusted for periodicity

= 1400(1-(1+.054/12)^-360)/(.054/12)

= $249,318.47

which you can round off to, say, $249,300 <------

note:

counterchechecked with a financial calculator