Jenny Buys her First Home

Pre-Calc Finance Project

Monthly Budget

Jenny earns $40,000 a year but after taxes are taken out she earns $28,000. This makes her monthly income $2,333.33. But she has some expenses to account for:

  • Monthly car payment of $230
  • She has $20,000 in student loans that must be paid of in 10 years making her monthly payment $230.16
  • Monthly insurance payment (15% of income) of $350
  • Monthly food and clothing budget (15%) at $350
  • Monthly entertainment budget (5%) at $116.67
  • Monthly savings (13%) of $303.33

After subtracting out all of Jenny's expenses, her new net income is $753.17

Jenny's Home Budget

Jenny can spend $753.17 towards a house. A 30 year loan is required making it 360 payments. Bank of America has a 30 year fixed interest rate of 4.734%. This allows Jenny to buy a house worth up to $144,650.29