1. Kanye and his wife, Kim, both work and have a
combined gross income of $165,000 per year. They estimate the property taxes on their
condo will be $2,100 and insurance would be about $1,500 per year. Kim has a car payment of $200 per month and
they are both still paying off student loans for a combined total of $600 per
month.

a. Suppose the couple can get a 30 year loan
with a rate of 3.5%, how much house could they afford based on the payment you
found in part a?