1. You are ready to buy a house and you have $60,000 for a down payment and closing costs. Closing costs are estimated to be 5% of the loan value. You have an annual salary of $80,000. The bank is willing to allow your monthly mortgage payment to be equal to 28% of your monthly income. The APR on the loan is 3% per year with monthly compounding for a 30-year fixed rate loan. (Do this with monthly payments.)

A. How much money will the bank loan you?

B. How much can you offer for the house?