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What is the maximum amount you could pay for a home

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Question - You're currently paying $1,700 per month in rent for an apartment in Boston. If you wanted to purchase a home but didn't want to pay any more in a monthly mortgage than you're paying now, what is the maximum amount you could pay for a home? Assume you would have a 30-year fixed-rate mortgage at 4.5% with interest compounded monthly.

In example 1 above, suppose the lending bank required you to pay a down payment equal to 20% of the purchase price. The purchase price less the down payment is the principal that will be borrowed from the lender and subject to the mortgage terms above. What is the purchase price?

Reference no: EM133088682

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