given your financial situation and the table above, you should be able to qualify for a home that costs between ( 1 ) and ( 2 ). If purchased, your loan would require monthly payments of (3)

1.A. $180,000 B. $120,000 C.$150,000 D. $210,000

2. A.$180,000 B. $210,000 C. $240,000 D. $150,000

3. A. $907-$1,088 B. $725-$907 C.$1,043-$1,216 D. $946-$1,135

Scenario: You are a single 30-year-old with a gross annual income of $41,500. You have been renting an apartment, but you are tired of the rules set by your landlord. You would like a place that you are free to fix up the way you want it. You are considering both condominiums and single-dwelling homes and are looking at the pros and cons of owning each type of housing. You would like to begin the home-buying process as soon as possible. You have $25,000 saved for a down payment, much of which was recently inherited from your late great aunt, and your family is willing to give you an additional $15,000. You are currently repaying a school loan, a car loan, and some credit card debt. Current interest rates with home lenders are averaging around 6.0% at this time. Given your financial condition above and the desire for a 30-year fixed-rate mortgage that requires a 20% down payment, use the 28% front-end ratio to identify the amount of the monthly payment necessary to cover the loan's principal, interest, taxes, and homeowners' insurance, as well as the gross annual income required to qualify for the loan. A table that may be used to facilitate this analysis follows. Remember that for each home price-interest rate combination, the upper number reflects the monthly payment and the lower number indicates the borrower's required annual income. Price of home / Interest rate $120,000 $ 150,000 $ 180,000 $210,000 $240,000 3.0% 555 693 832 971 1,109 23,800 29,700 35,700 41,600 47,500 4.0% 608 760 912 1,064 1,217 26,100 32,600 39,100 45,600 52,100 665 5.0% 832 998 1,331 1,164 49,900 28,500 35,700 42,800 57,000 6.0% 725 907 1,088 1,269 1,451 31,100 38,900 46,600 54,400 62,200 7.0% 789 986 1,183 1,380 1,577 33,800 42,300 50,700 59,200 67,600 Given your financial situation and the table above, you should be able to qualify for a home that costs between If purchased, your loan would require monthly payments of and