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19 May, 15:43

Milo can afford a $900 monthly mortgage payment. If the current mortgage rates are 5% and he wants a 30-year mortgage, what is the maximum amount he can afford to borrow?

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  1. 19 May, 18:21
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    Approximately $167,653. First, you compute the number of periods as 30 years multiplied by 12 months to get 360 monthly periods. Next, you compute the monthly mortgage rate as 5% divided by 12, or roughly 0.42%. Then, using a payment of $900 monthly, 0.42% for the interest rate, future value of $0, and 360 monthly periods, you compute the present value (PV) as $167,653.
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Home » Business » Milo can afford a $900 monthly mortgage payment. If the current mortgage rates are 5% and he wants a 30-year mortgage, what is the maximum amount he can afford to borrow?
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