The Langs are planning to purchase their first home. Their gross monthly income is $6,000. They have two loans: a car loan ($360/mo.) and student debt ($200/mo.) Their parents are gifting them $50,000 for the down payment, so they just have to worry about the mortgage. They are applying for a 30- year, 5% mortgage. The bank's rule requires a maximum of 28% of gross monthly income be used to amortize the mortgage and 36% of the gross monthly income to amortize the mortgage plus the other installment debt. Ignore property taxes and insurance.

Under the bank's rules:

a. How much can the maximum monthly mortgage be?

b. How much can the total mortgage be? (Hint: use the PMT function)

c. What is the total maximum price of a home mortgage plus gift?

d. What are the key benefits (tax and otherwise) the Langs expect to get from buying the home?