The correct answer is option B : Change the interest to 5.5%

## Step-by-step explanation:

Giselle wants to buy a condo that has a purchase price of \$163,000.

She earns \$2,986 a month and wants to spend no more than 25% of her income on her mortgage payment.

Means the maximum she will spend is dollars.

She has saved up \$33,000 for a down payment.

So, loan amount or principle will be = dollars

Giselle is considering the following loan option: 20% down, 30 year at a fixed rate of 6.25%.

Lets check the monthly payment for this option:

The EMI formula is: p = 130000

n = r = Putting the values in formula we get: = \$800.43

This option is not viable.

## So, lets check other options.

1. Change to a 15 year fixed loan means n will be and rest values will be same.

Putting the values in formula we get, = \$1114.66

This is not viable.

b.  Change the interest to 5.5%

Now r = Rest will remain the same and n = 360

Putting the values in formula we get, = \$738.095

This is a viable option as EMI is less than \$746.50.

C. Change the down payment to 18% down So, p = n = r = Putting the values in formula we get: = \$822.97

This is also not viable.

Therefore, the correct answer is option B : Change the interest to 5.5%