Shakeia Duncan wants to know what home price she can afford. Her annual gross income is $45,000. She owes $550 per month on other debts and expects her property taxes and homeowner's insurance to cost $225 per month. She knows she can get an 8 percent, 30-year mortgage so her mortgage payment factor is 7.34. She expects to make a 20 percent down payment. What is Shakeia's affordable home purchase price? Do not round intermediate calculations and round your final answer to the nearest $100.
a) $110,700
b) $254,800
c) $42,500
d) $88,600
e) $199,300