Living the Life in KC

Hour 5 Pre Calc Finance Project By Danny Hernandez

Scenario 2

Harper earned her bachelor’s degree in business two years ago. She is now 25 and is managing a retail store. Her annual salary is $70,000. She has $35,000 in student loans, and also has a car payment of $325 per month. She has just bought a house on 8505 NE 91st Street Kansas City MO, 64157

Monthly Budget

Harper receives $70,000 per year but with a 30% tax she keeps $49,000 a year or $4,083.33 per month. Her monthly payments add up to $2017.78 and consists of:
  • Food: $280
  • Student loans: $402.78
  • Car Payment: $325
  • Phone Bill: $80
  • Utilities: $400
  • Transportation and Entertainment: $530


Harper has a remaining $2065.55 per month to spend on her house with a 30 year fixed rate of 3.625% that was found on on February 15. Based on the PV equation, Harper can afford a house costing $452,920.54, but she will purchase a house for $419,950 to avoid maxing out the budget. By purchasing a $419,950 the PV equation shows that the monthly payment for the house would decrease to $1,915.19 with an interest of $269,468.40.

Amortization Table

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New Payment

By increasing the monthly payment by 15%, Harper ends up paying $2202.5 per month, but pays the mortgage in quicker time. She can now pay it in 20 years and 8 months, which is 9 years and 4 months earlier. She will also be saving $143,699.70 by increasing her monthly payment by 15%.


(February 15, 2016). 8505 NE 91st Street, Kansas City, MO 64157 | MLS 1975165. Retrieved from
(February 15, 2016). How Much Money Do You Spend on Food Every Month? Retrieved from
(February 15, 2016). Mortgages - Home Mortgage Loans from Bank of America. Retrieved, from