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A young businessperson wishes to buy a house but can afford monthly payments of only $500. Thirty-year loans are availab...

A young businessperson wishes to buy a house but can afford monthly payments of only $500. Thirty-year loans are available at 4.5% interest compounded monthly. What is the price of the most expensive house that she can afford to purchase. Please show your work

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Answer #1
PVOrdinary Annuity = C*[(1-(1+i/100)^(-n))/(i/100)]
C = Cash flow per period
i = interest rate
n = number of payments
PV= 500*((1-(1+ 4.5/1200)^(-30*12))/(4.5/1200))
PV = 98680.58
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