What is the price range of houses they should consider

Reference no: EM13201908

The Johnsons have accumulated a nest egg of $20,000 that they intend to use as a down payment toward the purchase of a new house. Because their present gross income has placed them in a relatively high tax bracket, they have decided to invest a minimum of $1200/month in monthly payments (to take advantage of the tax deduction) toward the purchase of their house. However, because of other financial obligations, their monthly payments should not exceed $1500. If local mortgage rates are 7.5%/year compounded monthly for a conventional 30-yr mortgage, what is the price range of houses they should consider?

Reference no: EM13201908

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