By: Joe Kalberer
After deducting regular monthly expenses such as, taxes, food, gas, and various utilities from my annual salary ($60,000) I determined that an appropriate monthly payment on my house would need to be between $500 and $700. I came to the conclusion that it would be smart to not pay the minimum and chose to pay 15% of the minimum payment, which is $589.54.
I decided that since I'm single and not ready to mingle , I did not need a very expensive house. I decided that I needed something between the $80,000-$120,000. This is very reasonable for someone who makes $60,000 a year on his annual salary. He needs some extra money so that he can go out on the weekends and have the social life that he wants. He also alone so he dosen't need a very large house with a lot of space, just something that he can have people over and throw party's
I bought $115,000 house and made a down payment of $15,000 therefore, my loan was for $100,000. Since I am making a monthly payment for thirty years the N value was 360. The interest rate that I looked up was 4.6% and the present value of the loan is $100,000. When I finally pressed ALPHA and then solve and the answer came out to be $512.64
My minimum monthly payment was $512.64 and when I multiplied that number by .15 the answer was $589.54. I multiplied 512.64 by 360 because thats how many payments that it would take. Then I Multiplied 589.54 by 277.56 because thats how many payments it would take to pay off the loan at the increased 15% monthly payment. I subtracted the minimum monthly payment total by the minimum lament that was increased by 15%. The final answer ended up being $22,686.30 which is the amount that I would save by paying 15% above the minimum monthly payment.