Question 1113578
their monthly mortage will be between 2900 per month and 3200 per month.

the present value of end of the month payments of 2900 at 4% compounded monthly for 15 years is equal to $392,057.23.


the present value of end of the month payments of 3200 at 4% compounded monthly for 15 years is equal to $432,614.88.


add the $50,000 down payment to that and you get:


at 2900 a month mortgage payments, they can afford a house that costs $442,057.23.


at 3200 a month mortgage payments, they can afford a house that costs $482,614.88.


to determine the present value of the mortgage, you can use the following financial value calculator.


<a href = "https://arachnoid.com/finance/" target = "_blank">https://arachnoid.com/finance/</a>


my inputs and outputs for 2900 a month are shown below:


<img src = "http://theo.x10hosting.com/2018/040201.jpg" alt="$$$" >


<img src = "http://theo.x10hosting.com/2018/040202.jpg" alt="$$$" >



my inputs and outputs for 3200 a month are shown below:


<img src = "http://theo.x10hosting.com/2018/040203.jpg" alt="$$$" >


<img src = "http://theo.x10hosting.com/2018/040204.jpg" alt="$$$" >


the number of time periods was 15 * 12 = 180.


the interest rate percent per time period was 4/12 = .33333333.


monthly payments were entered as negative which made the present value come out as positive.


these are cash flow concepts.


money going out from you is negative.
money coming back to you is positive.


you get the money up front (present value is positive).
you make the monthly payments (monthly payments are negative).