Beautiful New Home
Honors PreCalculus Finance Project By: Wyatt O. Hour 4
Brent's Life Expenses & Buying a Home
Food and Water: $325
Entertainment: $175
Cell Phone: $90
Retirement: $250
Insurance (Home, Car, Health): $350
Internet/Cable: $50
Utilities (Gas, Electric, Water): $100
Home Owners Association Fees: $22
It costs Brent $1,362 per month for this less than extravagant lifestyle, so he has $20,256 left for a home at the end of the year. Divided by 12 to get the monthly payment; Brent can pay $1,688 a month. Brent can get a 4.5% interest rate from Bank of America for a 30 year fixed mortgage. Brent's price range is from about $320,000-$340,000.
PV=(1,688 ( 1− (1+(.045/12))^−360)/(.045/12)
PV=$333,145.64 (the total amount he can afford)
The House
Brent's House
Brent got this house for just $328,000.
Brent's Kitchen
Brent's Bedroom
Increasing the Principle
328,000=1ˏ941.20 ( 1− (1+(.045/12))^−n
n=268.26
268.26/12(monthly payment)=22.355 years
Brent would be able to pay off his mortgage in 22 years 4 months and a week! He would save just under 8 years of payments. $1,688x12(months)x7.645(years)=$154,857.12 in savings.
APA Citations
(2014, January 2). Mortgage Rates Today. Retrieved from https://www.bankofamerica.com/home-loans/mortgage/custom-mortgage-rates-today-results.go.
House:
(2014, January 2). Re/Max Reality Suburban. Retrieved from http://www.remax-midstates.com/remaxmidstates/modules/internet/search/includes/mapsearch/listingpopup.aspmlsid=311&mlsnumber=1842202&lwsaccountid=54248&listing=true&301=n&mode=DoneSignup.