Real Estate Math
A buyer wants to purchase a property with a 30-year mortgage at $1,200 per month (principal and interest). If the annual interest rate is 6%, approximately how large a loan can the buyer afford? (Use factor: $5.996 per $1,000 borrowed at 6%/30 years)
A$180,000
B$6✓ Correct
C$214,285
D$162,000
Explanation
Monthly payment per $1,000 = $5.996. Loan amount = ($1,200 ÷ $5.996) × $1,000 = 200.13 × $1,000 ≈ $200,120.
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