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A landlord needs to update a rental house due to it's age, so it can be habitable again. If he has that ability to cover a $1,500.00 payment monthly for 3 years at 5% compounded monthly, how much can he borrow and still be able to afford the payment?

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Zviko

Answer:

$50,048.55

Explanation:

Use the Time Value of Money Techniques to Find the Principle (PV), that is the amount to be borrowed under the conditions given.

Pmt =  - $1,500.00

N = 3 × 12 = 36

i = 5%

P/yr = 12

Fv = $0

Pv = ?

Using a Financial calculator to enter the amount as done above the Principle amount would be $50,048.55

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