Based on his current earnings and expenses

Assignment Help Business Economics

Reference no: EM131005343

John bought a home after graduation and he is saving for the closing costs ($3000) and down payment. To avoid paying mortgage insurance and to get a better interest rate, he needs a down payment of 20%. He can afford a monthly payment of $700 based on his current earnings and expenses. The amount available for the mortgage is reduced by an estimated $200 per month to cover home insurance and real estate taxes. The current nominal annual interest rate is 4% for a 30 year fixed mortgage loan, payments made monthly. How much of a loan can you afford? What is the corresponding house price? How much must John save?

Reference no: EM131005343

Questions Cloud

Measured output in the non-farm business sector increased : Between Q1, 2014 and Q1, 2015 measured Output in the non - farm business sector increased by 3.2%. During this time period the unemployment rate fell from 6.6% to 5.5% and total hours worked in the nonfarm business sector increased by 2.8%. What was ..

The lease qualifies as a capital lease to brand : Ten annual payments of $55,000 (including executory costs) beginning January 1, 2011, the inception of the lease and each December 31 thereafter through 2019.

Imposing trade restrictions on imported ball bearings : Suppose there is a policy debate regarding the United States’ imposing trade restrictions on imported ball bearings: A senator from a state with several ball-bearing factories explains that it is necessary to impose trade restrictions, such as a tari..

Explain in terms of the underlying economic meaning : Suppose that the supply curve for gold is very steep (positively sloped, but almost vertical). Would a $ T tax tend to have a relatively large or a relatively small effect upon the quantity exchanged in the market? Would there tend to be a relative..

Based on his current earnings and expenses : John bought a home after graduation and he is saving for the closing costs ($3000) and down payment. To avoid paying mortgage insurance and to get a better interest rate, he needs a down payment of 20%. He can afford a monthly payment of $700 based ..

Assume the contract specified that nrc : Prepare the appropriate entries for both the lessee and lessor to record the second lease payment, executory costs, and depreciation (straight line) on December 31, 2011.

How that will affect the money demand curve : An increase in the supply of money will lead to a(n) ____ in equilibrium real GDP and a(n) _____ in equilibrium price level. To close an inflationary gap using monetary policy, the Federal Reserve should _____ the money supply to _____ investment and..

What is optimal consumption bundle-optimal value of ribs : Vasco likes spare ribs, R, and fried chicken, C. His utility function is: U(C, R) = 40R^2C. His weekly income is $180, which he spends on only ribs and chicken. If he spends $20 for a slab of ribs and $10 for a chicken, what is his optimal consumptio..

User Account

All Pages