Real Estate Math
A New Mexico home buyer wants to stay below a $1,500/month PI payment. At 7% annual interest, a 30-year loan, the payment factor is $6.65 per $1,000 borrowed. What is the maximum loan amount?
A$215,000
B$225,564✓ Correct
C$232,000
D$200,000
Explanation
Maximum loan = (Maximum Payment / Payment Factor per $1,000) x $1,000 = ($1,500 / $6.65) x $1,000 = 225.56 x $1,000 = $225,564.
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