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Over the past 30 years, interest rates have varied widely. The rate for a 30-year mortgage reached a high of 14.75% in July 1984, and it reached a low of 4.64% in October 2010.
A significant impact of lower interest rates on society is that they enable more people to afford the purchase of a home.
We consider the purchase of a home that sells for $125,000.
Assume that we can make a down payment of $25,000, so we need to borrow $100,000.
We assume that our annual income is $40,000 and that we have no other debt.
Lending agencies usually require that no more than 28% of the borrower's monthly income be spent on housing.
Then monthly income that could be spent on housing in this case would be $______.
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