Bank A uses a capacity-to-repay criteria to determine the maximum amount that a personal customer can borrow. The criteria is that maximum monthly repayment is 35% of gross monthly income. The customer has an annual income of $70,000, and the loan in question is a 30 year loan with monthly compounding at 6%. Determine the maximum loan the bank will extend to the customer by carrying out the appropriate workings.

Working

Gross Income =

Monthly Income =

Maximum monthly repayment Capacity =

Borrowing Capacity =