# Honors Precalc Finance Project

### Lindsey Spillar, hour 7

~Brent is a construction foreman who did not attend college. He is 24 years old, and earns an annual salary of \$60,000. He has a car payment of \$450.00 each month.
~After taking 30% of taxes out of his annual salary, Brent's salary comes to \$42,000. Then by dividing this by 12 (months) he has a monthly income of \$3,500. However, since his car payment is \$450 each month, his monthly total is \$3050.
~Since a morgage is between 25-30% of ones monthly income, taking 25% out of \$3050 comes to a minimum monthly payment of \$762.50 for Brent to pay for a house each month. This way, he will have a little over 75% of his income for his other spending needs.

## Equation used to find how much total Brent can afford to borrow

• Brent's total cost that he can afford to borrrow is (PV=) \$148,306.05

## Brents house

• Located at 5817 W 101st Place Overland Park, KS 66207
• List Price: \$179,900, but with a down payment of \$35,980
• After subtracting the down payment, Brent's house is \$143,920
• With the interest rate of 4.625%,and a term of 30 years monthly, his monthly payment is \$739.95

If Brent were to increase his minimum monthly payment by 15%, his monthly payment would be \$850.94. Instead of 30 years, it would only take 22 years and 10 months which would save him 7 years and 2 months to pay off his loan. Subtracting the initial payment from the increased by 15% payment, Brent would save \$32,977.67.