You are ready to buy a house, and you have $20,000 for a down payment??/???? and closing costs????/?????.

Closing costs are estimated to be 4% of the loan value.

You have an annual salary of $36,000, and the bank is willing to allow your monthly mortgage payment to be equal to 28% of your monthly income.

The interest rate on the loan is 6% per year with monthly compounding (.5% per month) for a 30-year fixed rate loan.

1. How much money will the bank loan you?

2. How much can you offer for the house?