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Problem 3 (7 points) Mounir is planning to buy his first house. He figured that he can afford to pay up to $1,600 per month.

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Problem 3 (7 points) Mounir is planning to buy his first house. He figured that he can afford to pay up to $1,600 per month. The bank will lend him 85% of the purchase price of the house at an annual rate of 5% for a four year term. The mortgage will be amortized over 30 years. (a) (3 points) What is the maximal house price he can afford

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