Show all work and formulas 2.) Jenny and Paul Hardin are relocating to Austin, TX in January 2017. Jenny’s new job will offer her $23,000 a year,…

Show all work and formulas

2.) Jenny and Paul Hardin are relocating to Austin, TX in January 2017. Jenny’s new job will offer her $23,000 a year, while Paul’s new income will be $31,500. Both of their employment packages promised annual increases. Jenny will get 4.25% and Paul gets 5.75% increases every year. After some research, the Hardins decided that they should live in the Green Valley, a suburb of Austin so their son Evan can attend the best school in the area. According to the Federal National Mortgage Association (FNMA), the qualifying income for the median priced house in the Green Valley area would be $55,100 .

a) What would be the Housing Affordability Index (HAI) ?

b) What does this index mean for the Hardins? Can they buy a house in the Green Valley? And if not, how would they be able to?

Given that the inflation rate is expected to be 3.5% after 2017. Assume that only income, but not the median price of $55,100 would be affected by inflation.