You have just signed a contract to purchase your dream house. The price is $120,000 and you have applied for a $100,000, 30-year, 5.5 percent loan. Annual property taxes are expected to be $2,000. Hazard insurance will cost $400 per year. Your car payment is $400, with 36 months left. Your monthly gross income is $5,000. Calculate:a. The monthly payment of principal and interest (PI).b. One-twelfth of annual property tax payments and hazard insurance payments.c. Monthly PITI (principal, interest, taxes, and insurance).d. The housing expense (front-end) ratio.e. The total obligations (back-end) ratio.
