(adsbygoogle = window.adsbygoogle || []).push({}); 1. The problem statement, all variables and given/known data

alice wants to take out a 20 yr mortage. the interest rate is 8% compounded semi-annually. alice can afford monthly payments of $850. what is the largest mortage that she can afford?

2. Relevant equations

3. The attempt at a solution

this is using a graphing calculator:

N= 20 x 12 = 240

I%= 8

*PV= 102 612.70???

PMT= -850

FV = 0

P/Y = 12

C/Y = 2

PMT = END

but im suppose to solve this without a graphing calculator.

PV = (R(1-(1/1+i)^n)/i

R = 850

n = 240

i = ????

for i i had 1.04^(1/8) - 1 = 0.004914626.. i think that's where my problem is. but dunno.

for the answer i got $119,628.45... but that doesnt match the $102,612.70 from my graphing calculator.

any help is appreciated

~Amy

**Physics Forums | Science Articles, Homework Help, Discussion**

Dismiss Notice

Join Physics Forums Today!

The friendliest, high quality science and math community on the planet! Everyone who loves science is here!

The friendliest, high quality science and math community on the planet! Everyone who loves science is here!

# Quick mortgage math question

Tags:

**Physics Forums | Science Articles, Homework Help, Discussion**