If a familys gross annual income is 53400 use appropriate co

If a? family\'s gross annual income is ?$53,400?, use appropriate computations to determine whether the family can afford a ?$190,000 30?-year ?fixed-rate mortgage at 5?%. Choose the correct answer below.

A. The family cannot afford the mortgage because the monthly payment is less than what they should pay each month.

B. The family cannot afford the mortgage because the monthly payment is greater than what they should pay each month.

C. The family can afford the mortgage because the monthly payment is greater than what they should pay each month.

D. The family can afford the mortgage because the monthly payment is less than what they should pay each month.

Solution

Answer) D. The family can afford the mortgage because the monthly payment is less than what they should pay each month.

Annual Income = $ 53400

Monthly Income = $ 53400/12 = 4450

While the mortgage payment of principal and interest is 1019.96.

Principal = $ 228.29

Interest =$ 791.67