Imagine that you are a banker getting a loan ready for a client, Jama Hamza. They are buying a 1700 square foot home for the price of $374,500. In order to avoid PMI, Abdi puts 10% of the price as a down payment. He qualifies for 5.68% annual interest rate for a 30 year loan.

Round all answers to the nearest cent.

• Jama also qualifies for a 15 year loan at an annual rate of 4.2%. How much money would he save on interest if he took this loan instead of the 30 year loan?
• Most lenders will approve a home loan if the total of all the borrowers monthly payments, including the home loan is no more than 38% of the borrowers total monthly income. How much must Jama make in order to qualify for the loan?