t = 25 yrs.
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4. Susie is looking to borrow money for a mortgage to buy a house. The most she can afford to pay in monthly payments is $1,450. What is the maximum house price she can afford if the bank charges interest of 5.9% compounded semi-annually and she needs to make a down payment equal to 20% of the purchase price of the home? (5 marks)
(First, calculate the maximum mortgage she can afford. Then, solve for the purchase price of the home using the down payment information. Remember that the purchase price of the home is equal to the mortgage amount plus the down payment amount)