From the image, you are asked to determine how big of a loan you can afford if you can pay $350 per month, with a 4-year loan at 3% interest. Let's break it down step by step:

1. Loan Details:

   • Monthly payment ($P$) = $350
   • Loan term ($n$) = 4 years = 48 months
   • Annual interest rate ($r$) = 3% per year, or $0.03 \div 12$ per month = $0.0025$ per month

2. Loan Formula: The formula to calculate the loan amount ($L$) is derived from the formula for an installment loan:

   $L = \frac{P \cdot \left(1 - (1 + r)^{-n}\right)}{r}$

   Plugging in the values: $L = \frac{350 \cdot \left(1 - (1 + 0.0025)^{-48}\right)}{0.0025}$

3. Calculation: I'll compute the value for you.

$L = \frac{350 \cdot \left(1 - (1 + 0.0025)^{-48}\right)}{0.0025}$

Let's calculate it.

$L \approx \frac{350 \cdot 0.1123}{0.0025} \approx 15,734.5$

So, you can afford a loan of approximately $15,734.50.

Would you like more details or clarifications on any part?

Related Questions:

1. How does the interest rate affect the loan amount I can afford?
2. What would happen if I increased my monthly payment?
3. How would the loan change with a longer term, say 5 years?
4. How much interest would I end up paying over the life of the loan?
5. What would happen if I found a loan with a 2% interest rate instead?

Tip: Always compare loans using the total interest paid over the term, not just the monthly payments!