A couple is considering buying a house. Theyve shopped around for loans and found that they can get a 30-year, fixed-rate loan of 4.7% annual, compounded monthly. The loan will require monthly payments.

The couple first want to determine how much house they can afford. They do some budgeting and decide that they could afford to pay $2,100 a month on their mortgage. How much house can they afford on these terms assuming they will finance the entire purchase?