What monthly payment can she afford?

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 Your sister is considering the purchase of a home rather than renewing the lease on her two-bedroom apartment.   She is currently paying $850 per month for rent.  She has asked you to help her decide what sort of home she might be able to afford for the $850 per month.  Her bank offers first-time home buyers (with good credit) a 30-year mortgage at a fixed rate of 5.49%.  If the cost of insurance and property taxes is about $175 per month in the neighborhood where she’d like to live.

Oct 19th, 2017

The value of the house that she can afford with 360 amortizations of $675 with discount rate of 5.49% is 

($12,295.08)
This was obtained using PV(rate,nper,pmt) fomula in excel.    The amount $675 was obtained from : $850 -$175= $675.

Apr 13th, 2015

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