**Answer:**

**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%**