document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=144647>Question 144647</A>This question is from textbook <A HREF=http://www.amazon.com/exec/obidos/ASIN/0072967137/algebrahomeworkh>PRACTICAL BUSINESS MATH PROCEDURES</A><BR>\n" );
document.write( ": <I><SPAN STYLE=\"word-break: break-all;\"> PLEASE HELP ME WITH THIS QUESTION: THANKS\r<BR>\n" );
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document.write( "ON JULY 26,2003, THE MINNEAPOLIS STAR TRIBUNE QUOTED AN EXECUTIVE VICE PRESIDENT AT ABN AMRO SAYING THAT 10% DOWN PAYMENTS HAD BECOME COMMON.  FOR MOST CONVENTIONAL LOANS, A DOWN PAYMENT OF LESS THAN 20% MEANS BUYERS MUST PURCHASE PRIVATE MORTGAGE INSURANCE (PMI).  DAVE MARVIN WANTS TO AVOID STHE PMI AND HAS $30,000 FOR A DOWN PAYMENT.  A LOCAL BANK IS OFFERING 7% ON A FIXED 30 YEAR MORTGAGE. (A)WHAT IS THE MOST DAVE WILL BE ABLE TO PAY FOR A HOME? (B) WHAT WOULD BE HIS MONTLY PAYMENT? </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #105463 by </B><A HREF=/tutors/aboutme.mpl?userid=solver91311><B>solver91311(24713)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=solver91311><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/cgi-bin/show-face.mpl?user=solver91311><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=105463\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> Solve <IMG STYLE=\"max-width:80%;\" SRC=/cgi-bin/plot-formula.mpl?expression=0.20x=30000 ALIGN=MIDDLE  ALT=\"0.20x=30000\"   DISABLED_style= \"max-width:90%; height:auto;\" > to get the maximum total purchase price that Dave can pay without paying PMI.\r<BR>\n" );
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document.write( "Calculate: <IMG STYLE=\"max-width:80%;\" SRC=/cgi-bin/plot-formula.mpl?expression=%28P%28%281+%2B+r%29%5En%29r%29%2F%28%281+%2B+r%29%5En+-+1%29 ALIGN=MIDDLE  ALT=\"%28P%28%281+%2B+r%29%5En%29r%29%2F%28%281+%2B+r%29%5En+-+1%29\"   DISABLED_style= \"max-width:90%; height:auto;\" >, where P is the principal amount of the loan (total purchase price minus down payment: 150,000 from the first part of the problem minus 30,000 is 120,000), n is the number of payment periods (monthly payments for 30 years: 30 * 12 = 360), r is the interest rate PER PERIOD (0.07/12=0.00583).\r<BR>\n" );
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document.write( "Or save yourself some serious calculator button pushing.  Open an Excel worksheet and type in the following: =pmt(.00583,360,120000)<BR>\n" );
document.write( "Once you have typed it in, hit enter, you will get the monthly payment as a negative number (negative because it is presumeably coming OUT of your (or Dave's) pocket).  Don't forget to remind Dave that this amount is only Principal and Interest -- he is also responsible for property tax and fire insurance.<BR>\n" );
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