Over the past 40 years, interest rates have varied widely. The rate for a 30-year mortgage reached a high of 14.75% in July 1984, and it reached 3.31% in November 2012. A significant impact of lower interest rates on society is that they enable more people to afford the purchase of a home. In the following exercise, we consider the purchase of a home that sells for $125,000. Assume that we can make a down payment of $25,000, so we need to borrow $100,000. We assume that our annual income is $41,000 and that we have no other debt. Lending agencies usually require that no more than 28% of the borrower's monthly income be spent on housing. The amount we will spend on housing consists of our monthly mortgage payment plus property taxes and hazard insurance. Assume that property taxes plus insurance total $250 per month, and subtract this from the amount of our monthly income we can spend on housing to determine what monthly payment we can afford. (Round your answer to the nearest cent.) eBook