Question

Sheila Little has a gross monthly income of $3500. She has 15 remaining payments of $147 on a used car. The taxes and insurance on the house are $85 per month. What maximum monthly payment does the bank's loan officer feel that Sheila can afford?

Answer 1

Answer:

the maximum monthly payment is $958

Step-by-step explanation:

The computation of the maximum monthly payment for affording is shown below;

Let us assume that there is a 34% of the gross monthly income

So, it would be calculated below:

= Given percentage × gross monthly income - payments made - taxes & insurance per month

= 0.34 × $3,500 - $147 -$85

= $958

hence, the maximum monthly payment is $958