Question

If you can afford a monthly payment of $760 for 27 years and if the available
interest rate is 5.40%, what is the maximum amount that you can afford to borrow?
Pt = $760 * 12mo/yr * 27yrs = $246240.

Pt = Po*r*t / (1-(1+r)^-t = $246240.

Po = Inital loan amount.
r = (5.4%/12) / 100% = 0.0045 = Monthly
% rate expressed as a decimal.
t = 324mo = Length of loan.

Pt=Po*0.0045*324 / (1 - (1.0045)^-324 =
246240.

1.458*Po / (1 - 0.23346) = 246240.

Po = $129,459.49.

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