Kylie can afford a $1310-per-month house loan payment. If she is beingoffered a 25-year house loan with an APR of 8.4%, compounded monthly,which of these expressions represents the most money she can borrow?
Accepted Solution
A:
Answer:The amount which she borrow as house loan is $ 48514.56 Step-by-step explanation:Given as : The house loan per month afford by Kylie = $1310 The period of loan = 25 Years The annual rate compounded monthly = 8.4% Principal = $ P ∵ The per month loan afford amount = $1310So, The amount afford in 25 years = $1310 × 25 × 12 Or, The amount afford in 25 years = $393,000Now, from compounded method : Amount = Principal × [tex](1+\frac{Rate}{12\times 100})^{12\times Time}[/tex]Or, $393,000 = $ P × [tex](1+\frac{8.4}{12\times 100})^{12\times 25}[/tex]Or, $393,000 = $ P × [tex](1.007)^{300}[/tex] Or, $393,000 = $ P × [tex]\frac{393,000}{8.10066}[/tex]∴ P = $ 48514.56 Hence The amount which she borrow as house loan is $ 48514.56 Answer