James is buying a house on a 30-year conventional mortgage at 6.25% APR.
He will put 3% down on the loan.
If he wants to keep his monthly payments at or below $1,000,
how much is the most expensive house James can buy?
The amortization formula is: .
. . where: .
We have: .
This is the maximum amount he can borrow,
. . which is 97% of the price of the house.
Therefore, he can buy a house up to: .