A standard rule for lenders is that a family's house payment should not exceed $28\%$ of their monthly

income. For a family making $$6500$ per month, this would equate to $$1820$ per month. Assuming

monthly costs of $$350$ for property tax and homeowner's insurance, this would allow for a $$1470$

monthly mortgage payment.

The formula $M=\frac{p*\frac{r}{n}}{(1-(1+\frac{r}{n}{)}^n)}($solving for $P$ this time$)$ or the Excel function $"pv"$ can be used to compute the mortgage a

family could afford. If using Excel the $3$ arguments of function $"$pv$"$ are:

Rate $($the monthly interest rate$)$: $\frac{0\mathrm{.}0625}{12}$

Nper $($the total number of monthly payments$)$ and

Pmt $($the monthly mortgage amount$)$

A$.$ Assuming that a family wants to make a $$1470$ monthly payment, give the mortgage that a family

could afford at an annual interest rate $6\mathrm{.}25\%$ for a $15-$year mortgage.

B$.$ Assuming that a family wants to make a $$1470$ monthly payment, give the mortgage that a family

could afford at an annual interest rate $6\mathrm{.}25\%$ for a $30-$year mortgage.