Question

You can afford a $700 per month mortgage payment. You've found a 30 year loan at 5% 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?

Answer 1

P=loan (present value)
i=interest rate = 5%/12=0.05/12
n=30 years = 360 months
A=amount each payment = 700

then by the amortization formula, 
P=A((i+1)^n-1)/(i*(1+i)^n)
=700((1+.05/12)^360-1)/((.05/12)*(1+.05/12)^360)
=130397.13

Total money = 700*360=252000

Interest=252000-130397.13=121502.87  (almost 50%).