You work for a bank in the mortgage department. A client asks you how much they can borrow if they can afford a mortgage payment of $1,200 per month. The current 30-year fixed rate mortgage has an APR of 6.50%. Your client is also considering a 15-year mortgage that has a current APR of 5.75%. What can your client borrow under the two scenarios? The periodic rate (in this case the monthly rate) is found by dividing the APR by number of periods in a year (in this case 12).