Pete and Pam Want to Purchase a New Home but Don't

question 49

Multiple Choice

Pete and Pam want to purchase a new home but don't know how much mortgage they can qualify for.The lender requires total installment loan payments not exceed 32% of gross monthly income.Based on Pete and Pam's financial data below,what is the maximum monthly mortgage payment for which they can qualify?

• A) $1,700
• B) $1,600
• C) $ 900
• D) $ 600
• E) $ 500

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Definitions:

System-2 Thinking

Reflective critical thinking that is useful for judgments in unfamiliar situations, for processing abstract concepts, and for deliberating when there is time for planning and more comprehensive consideration.

Comprehensive Consideration

A thorough and all-encompassing approach to analyzing or thinking about a problem, situation, or decision.

Reflective Critical

The process of critically assessing one's beliefs, judgments, and practices through introspection and consideration of external inputs.

Salient Memories

Vivid and prominent memories that stand out due to their significance or emotional impact.