Michelle Duncan wants to know what price home she can afford.Her annual gross income is $45,000.She owes $550 per month on other debts and expects her property taxes and homeowners insurance to cost $225 per month.She knows she can get an 8%,30-year mortgage so her mortgage payment factor is 7.34.She expects to make a 20% down payment.What is Michelle's affordable home purchase price? Round your answer to the nearest $100.

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The correct answer is A. Michelle's affordable home purchase price is $110,700. To calculate this, we need to first calculate her monthly housing expenses. Her mortgage payment would be $45,000 x 0.20 = $9,000 down payment. Her monthly mortgage payment would be $9,000 x 0.08 x 7.34 = $534. Her total monthly housing expenses would be $534 + $225 = $759. We then need to calculate her debt-to-income ratio. Her total monthly debt payments would be $759 + $550 = $1,309. Her debt-to-income ratio would be $1,309 / $45,000 = 0.29. This means that Michelle can afford a home purchase price of $110,700.

Michelle Duncan Wants to Know What Price Home She Can