Suppose you are paying $800 a month in rent, and decide that you could pay $900 a month to own either a very small house or condominium. What amount can you afford to finance that will cost $900 a month? To answer this, google search for Mortgage Calculator. (Note: there are also Auto Loan Calculators when you are ready to buy a car.) For this exercise, assume no down payment and that the loan is for 30 years. Round your answers to the nearest thousand dollars. 1. Find out how much you can borrow for $900 a month at a) 6% interest

b)5% interest

For the amounts that you could borrow at 6% and 5% yearly interest, determine the

1. Absolute change

2. Relative change