10.) The Consumer Financial Protection Bureau requires that all lenders make sure that any borrowers monthly debt payments and obligations must not exceed 43% of their pre-tax monthly income. The Martinez family is planning on buying a home, and they have applied for a $301,000 mortgage for 30 years at 4.1% compounded monthly. Their pre-tax income is $60,000 per year. If we assume that the property taxes and the insurance on the home together would be $7,800 year, and the Martinez family have no other debt obligations, then a) What would be their average monthly debt payments and obligations, in dollars, b) What percentage of their monthly pre-tax income is this, and c) Do they qualify for the mortgage?

Use just these formulas from this formula sheet!! Write it down which formula did you used, either write down the whole formula from the formula sheet which you are using or type the number which formula did you used. EXAMPLE: I used formula number 1,2,3,4,5,6,7,8 or 9. If you need to use more than one formula write it down for example " I used formula number 3 for this part of the problem and formula number 4 for that part of the problem" Solve the problems step by step. Show your calculation. DO NOT USE EXCEL, DO IT MANUALLY!! Thank you!!

FORMULA SHEET 1. SIMPLE INTEREST A = P. (1+rt) 2.COMPOUND INTEREST = P. (1+3) FUTURE VALUE and PRESENT VALUE for SINGLE DEPOSIT -nt 3, FV = pv. (1 + )" 4, PV = fv. (1+3) 5. EFFECTIVE RATE OF EFFECTIVE YIELD = (1+3)-1 APY = Pell FUTURE VALUE OF ORDINARY ANNUITY & MONTHLY PAYMENT FV(r) FV = A 7. A= (r) nt PRESENT VALUE OF ORDINARY ANNUITY & MONTHLY PAYMENT 8, pv=al- (1 1 * 9. A PV(r) (r) 1 - (1 + 3) "1 P.S: Use formulas just from these sheet and type which formula did you used. DO NOT USE ANY OTHER FORMULA. Because we have to show our work and results only through these formulas. Thank you