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Unformatted text preview: monthly payments of $2,500. Suppose that the current 30 ‐ year fixed te mpounded onthly hat’s e ost xpensive rate is 6%, compounded monthly. What s the most expensive house you can afford? 2. How must of your first month’s payment goes toward paying off the principal? Keep in mind: We ignored that under current federal tax law, the interest portion of your mortgage payment is tax deductible (so w/ tax deduction, you could afford more!) 1 note: banks no longer allow zero ‐ down...
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- Fall '08
- single lump sum, pure discount loans, Basic loan types, future ‐‐‐, w/ tax deduction