You can afford a $800 per month mortgage payment. You've found a 30 year loan at 7% interest. a) How big of a loan can you afford? $ b) How much total money will you pay the loan company? $ c) How much of that money is interest? $

a) $1,133,119.65.

b) $288,000

c) $845,119.65

Step-by-step explanation:

Future value with annuity:

The future value formula, for an annuity, is:

An annuity means that a number of payments happen during the period.

P is the value of the deposit, r is the interest rate(per year), as a decimal, and n is the number of deposits.

800 per month:

So .

Each month, for 30 yeas:

This means that

7% interest

Yearly, however, we pay the amount monthly. So

a) How big of a loan can you afford?

This is FV.

You can afford a loan of $1,133,119.65.

b) How much total money will you pay the loan company?

$800 for 360 months. So

$800*360 = $288,000

You will pay the loan company $288,000

c) How much of that money is interest?

The rest of the $1,133,119.65.

$1,133,119.65 - $288,000 = $845,119.65

$845,119.65 of that money is interest.

good luck!

cutie~