Question

Wyatt can afford a $1290-per-month house loan payment. If he is being offered a 30-year house loan with an APR of 7.2%, compounded monthly, which of these expressions represents the most money he can borrow?

Answer 1

Answer:

The most money he can borrow : $ 17916.67

Step-by-step explanation:

Formula for Monthly Payment is given by :

$P=\frac{r\times PV}{1-(1+r)^{-n}}$

P : Monthly Payment = $1290

r : Rate per period = 7.2%

n : Number of periods = 360

To be calculated : PV : Present Value

Now, Substituting values in the formula :

$1290=\frac{\frac{7.2}{100}\times PV}{1-(1+\frac{7.2}{100})^{-360}}\\\\PV=\frac{1290\times (1-(1.072)^{-360})}{0.072}\\\\\bf\implies PV=\ 17916.67$

So, the most money he can borrow : $ 17916.67

Answer 2

Answer:

($1290)((1+0.006)^360-1)

___________________

(0.006)(1+0.006)^360

Step-by-step explanation: