Question
Your parents want to buy a condo in Vancouver. Banks use the affordability rule: no more than 32% of gross monthly household income can go
Your parents want to buy a condo in Vancouver.
Banks use the affordability rule: no more than 32% ofgrossmonthly household income can go towards paying the mortgage, property taxes, heating costs and50%of the condo fees.
Their gross income is $10,000 per month, property taxes are $3,000/year, heating costs average $50/month and condo fees $400/month.
(a) What is the maximum monthly mortgage payment they could afford?
Under the Bank of Canada posted rate of j2= 4.94%, how large of a mortgage would they qualify for if it is amortized over 25 years and paid monthly?Express your answer as a whole number.
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Introduction to Managerial Accounting
Authors: Peter C. Brewer, Ray H Garrison, Eric Noreen, Suresh Kalagnanam, Ganesh Vaidyanathan
4th Canadian edition
978-1259103261
