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A couple wants to purchase a $ 2 6 0 , 0 0 0 house, and they have the required 2 0 % down payment

A couple wants to purchase a $260,000 house, and they have the required 20% down payment and money for other closing costs. The bank is offering a 30-year mortgage at 4.625% interest compounded monthly. The couple has annual after-tax income of $55,000, and other debts totaling $650 per month. (a) If the maximum debt-to-income ratio (total monthly debt divided by after-tax monthly income) is 43%, can the couple afford to purchase the home? (b) If the couple lives in the house for 30 years, what is the total amount paid for the house including down payment, principal, and interest?

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