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Problem:

An engineering graduate plans to buy a home. He has been advised that his monthly house and property tax payment should not exceed 35% of his disposable monthly income. After researching the market, he determines he can obtain a 15 year home loan for 3.5% annual interest per year, compounded monthly. His monthly property tax payment will be approximately $240.

Requirement:

Question 1: What's the maximum amount he can pay for a house If his disposable monthly e is $3,500?

Question 2: What Is the total amount of interest that will be paid on the loan if it held for the 15 year period?

Note: Provide support for rationale.

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M91166834

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