Question
A home buyer can afford to spend no more than 800/per month on mortgage payments. Suppose that the interest rate is 3% and that the
A home buyer can afford to spend no more than 800/per month on mortgage payments. Suppose that the interest rate is 3% and that the term of the mortgage is 30 years. Assume that the interest is compounded continuously and that payments are also made continuously.
a) Determine the maximum amount that this buyer can afford to borrow.
b) Determine the total interest paid during the term of the mortgage.
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