According to the National Association of Realtors,91 the minimum annual gross income, m

Chapter 1, Problem 28

(choose chapter or problem)

According to the National Association of Realtors,91 the minimum annual gross income, m, in thousands of dollars, needed to obtain a 30-year home loan of A thousand dollars at 9% is given in Table 1.41. Note that the larger the loan, the greater the income needed. Of course, not every mortgage is financed at 9%. In fact, excepting for slight variations, mortgage interest rates are generally determined not by individual banks but by the economy as a whole. The minimumannual gross income, m, in thousands of dollars, needed for a home loan of $100,000 at various interest rates, r, is given in Table 1.42. Note that obtaining a loan at a time when interest rates are high requires a larger income. (a) Is the size of the loan, A, proportional to the minimum annual gross income, m? (b) Is the percentage rate, r, proportional to the minimum annual gross income, m? 2

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