Finance Project
By Hannah Luebbering
Monthly Income
Brent, a construction foreman, was looking for a home in Kansas. He earns an annual salary of $50,000 before taxes. But he must make sure he leaves enough of his monthly income for necessities, food, and a $23,000 car with a 6.5% 5 year car loan that he just purchased.
Monthly Salary
Before Tax: $4, 166.67
After Tax: $4, 166.67- $1,250= $2,916.67
Monthly Car Loans
Rate = $450.02
Monthly Living Cost
Car Insurance: $60.00
Food: $250.00
Utilities: $200.00
Entertainment: $190.00
Car Payment: $450.02
Total Monthly Expenses: $1,150.02
Budget For House
$2,916.67- $1,150.02= $1766.65
- This is the maximum monthly budget that can be afforded for a house.
Chosen Home:
Brent found a home in Overbrook Road, Leawood, KS.
Total House Price= 299,000
Actual Monthly Payment
Brent has a monthly payment for the house mortgage that fits under his budget.
Interest Rate: 4.163 %
Minimum Payment Each Month: $1455.71
Total Amount of Money Spent: (360 payments) * ($1455.00) = $523,800
Money spent in Interest: $224,800.00
First Year Amortization:
Increased Principle
Increased Monthly payment: $1,674.07
Time Saved: (30 years)(12 monthly payments) - (24 years)(12 monthly payments)
TIME SAVED: 6 years
Total Amount of Money Spent: (280 payments) * ($1674.07) = $468,720
MONEY SAVED: $55,080
APA Website Citations
Bank of America — Banking, Credit Cards, Mortgages and Auto Loans. (n.d.). Retrieved February 05, 2016, from https://www.bankofamerica.com/