(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

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# Homework Help: Quick mortgage math question

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