College Math - Affordable Home Purchase Price
by April Dickey
(Ardmore, OK, USA)
Affordable Home Purchase Price
• Assume you can afford a down payment equal to 25% of your yearly income.
1. What is the total purchase price can you afford for a home?
2. Would this amount allow you to purchase a home in the area where you live?
Using 7% interest rate on a 25 year loan I get:
7.70x = 560
x = 181.818
181.818 * 1000 = $181,818
now we must add in my down payment 25% of my yearly income is:
.25 * 24,000 = $6,000
$181,818 + 6,000 = $187,818
Is this right or did I do it wrong?