Evaluate the following loan based on capacity John Doe and Jane Smith John and Jane are married, and would like to borrow for a car purchase. They will be trading in Jane's existing car as a down payment. They are both 35 and have 2 children, aged 7 and 5. John makes $87000 annually as the junior manager of Plus8 Distributing. After deductions, he keeps 70% he has been there 8 years. Jane does not work. They bought their house a number of years ago for $420000 and estimate it is now worth $505000. Annual property taxes are $5000 and they pay $145 monthly for heat. They pay $975 monthly on the mortgage which has a balance owing of $275000. They owe $2500 on an unsecured line of credit (which has an $6000 limit) and they pay the minimum on this. They also owe $1,000 on Visa with a $3750 limit, and $1,500 on Mastercard with a $3750 limit They own 2 cars, valued at $10,000 each. John's has a $6500 loan on it with monthly payments of $375. Car insurance $300 combined per month; House insurance is $700 per year; Rogers communication for phone, internet etc. is $190 per month; Jane also contributes $100 per month to her RRSP. They have $2,000 in their bank account and RRSPs of $55,000. All their debts are rated R1 or I1, and the highest historical rating is an R2 on the mortgage from 2 years ago. What is the most you would lend them based on TDSR limits using a loan rate of 4.3% over 6 years? Monthly payments and compounding