document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1203888>Question 1203888</A>: <I><SPAN STYLE=\"word-break: break-all;\"> you can afford $1,500 per month mortgage payment. you've found a 30 years loan at 6% 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 </SPAN>\n" );
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document.write( "Answers:<BR>\n" );
document.write( "(a) <font color=red>$250,187.42</font><BR>\n" );
document.write( "(b) <font color=red>$540,000</font><BR>\n" );
document.write( "(c) <font color=red>$289,812.58</font>\r<BR>\n" );
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document.write( "====================================================================================\r<BR>\n" );
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document.write( "Explanation for part (a)\r<BR>\n" );
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document.write( "Monthly payment formula<BR>\n" );
document.write( "P = (L*i)/( 1-(1+i)^(-n) )<BR>\n" );
document.write( "where,<BR>\n" );
document.write( "P = monthly payment<BR>\n" );
document.write( "L = loan amount<BR>\n" );
document.write( "i = monthly interest rate in decimal form<BR>\n" );
document.write( "n = number of months\r<BR>\n" );
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document.write( "For this problem:<BR>\n" );
document.write( "P = 1500<BR>\n" );
document.write( "L = unknown<BR>\n" );
document.write( "i = 0.06/12 = 0.005 exactly<BR>\n" );
document.write( "n = 30*12 = 360 months\r<BR>\n" );
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document.write( "Let's solve for L<BR>\n" );
document.write( "P = (L*i)/( 1-(1+i)^(-n) )<BR>\n" );
document.write( "1500 = (L*0.005)/( 1-(1+0.005)^(-360) )<BR>\n" );
document.write( "1500 = 0.00599550525152L<BR>\n" );
document.write( "L = 1500/0.00599550525152<BR>\n" );
document.write( "L = 250,187.421588817<BR>\n" );
document.write( "L = <font color=red>250,187.42</font>\r<BR>\n" );
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document.write( "The largest loan you can afford is <font color=red>$250,187.42</font>\r<BR>\n" );
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document.write( "------------------------\r<BR>\n" );
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document.write( "Explanation for part (b)\r<BR>\n" );
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document.write( "Over the course of 360 months (aka 30 years), you pay $1500 a month. <BR>\n" );
document.write( "This assumes you go with the max you can afford.\r<BR>\n" );
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document.write( "360*($1500) = <font color=red>$540,000</font> is the amount paid back. <BR>\n" );
document.write( "This consists of the principal (aka loan amount) of $250,187.42 calculated back in part (a), and also consists of interest as well.\r<BR>\n" );
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document.write( "------------------------\r<BR>\n" );
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document.write( "Explanation for part (c)\r<BR>\n" );
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document.write( "Subtract the results of parts (a) and (b) to compute the total interest.\r<BR>\n" );
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document.write( "interest = (total amount paid back) - (loan amount)<BR>\n" );
document.write( "interest = ($540,000) - ($250,187.42)<BR>\n" );
document.write( "interest = <font color=red>$289,812.58</font><BR>\n" );
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