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 an 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. the couple in problem above has only enough money for a 10% down payment and other closing costs. Thus the bank offering a loan at a higher rate of 5.15% and requiring private mortgage insurance, which costs 1% of the loan amount each year. If the maximum debt-to-income ratio (total monthly debt divided by after-tax monthly income) is still 43%, can the couple afford to purchase the home

c. If the couple lives in the house for 30 years, what is the total amount paid for the house including the down payment, principal, interest and private mortgage insurance?