You can afford a $800 per month mortgage payment. You've found a 30 year loan at 8% interest. 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?

Guest Feb 22, 2022

#1**0 **

Use this formula to find the PV of 360 payments of $800 each at 8% compounded monthly:

PV=?; P=800; R=0.08/12; N=30*12; PV=P*(((1 + R)^N - 1)*((1 + R)^-N)* R^-1)

**PV==$109,026.80 - amount of mortgage you can afford.**

**$800 x 360 months ==$288,000 principal + interest paid to the loan company.**

**$288,000 - $109,026.80 ==$178,973.20 - interest paid over 30 years.**

Guest Feb 22, 2022