SOLUTION: Suppose a bank offers you a 4% interest rate on a 15-year mortgage to be paid back with monthly payments. The most you can afford to pay in monthly payments is $800. What is the m

Question 1057693: Suppose a bank offers you a 4% interest rate on a 15-year mortgage to be paid back with monthly payments. The most you can afford to pay in monthly payments is $800. What is the maximum mortgage you can afford to take out for your home?

Answer by Boreal(15235) (Show Source): You can put this solution on YOUR website!
Principal=payment (1-(1+(r/n))^(-180))/(r/n), the 180 comes from years* months in a year, or 180 compoundings.
=800(1-(1+r/n))^(-nt))/(r/n)
=800(1-(1.0003333)^(-180)/(.003333) do without rounding.
=800(1-0.54935)/(.00333)
$108153.72.

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