### PreCalc Finance Project

# House in Overland Park

## Brent the construction worker's income

Brent earns an annual salary of $60,000. Since 30% goes to taxes and he has a $450 a month car payment, that leaves him with a $42,000 salary. Dividing this into 12 months, this leaves Brent with $3,500 monthly. Subtract the $450 car payment, he has a max amount of $3,050 max amount he can spend on a house monthly.

Note: For the following calculations, the cost of food, insurance, clothing, and other necessities are not considered.

## $169,900 houseLocated in Overland Park, Kansas this 4 bedroom, 2 1/2 bath is one that Brent, a construction foreman, can afford. Found on Reese & Nichol's website, this house has a 4.75% interest rate, and the total payment he would make per month on the mortgage would be $1,247. | ## Present value equationThis present value will give Brent the maximum value of money he can borrow, which turns out to be $584,686.20 for a house. | ## Finding RIn this equation, we are finding how much money Brent would spend for a 30 year fixed rate loan. R is how much he borrowed per month, $881.58. This grand total comes out to be $317,368. |

## $169,900 house

Located in Overland Park, Kansas this 4 bedroom, 2 1/2 bath is one that Brent, a construction foreman, can afford. Found on Reese & Nichol's website, this house has a 4.75% interest rate, and the total payment he would make per month on the mortgage would be $1,247.

## Present value equation

This present value will give Brent the maximum value of money he can borrow, which turns out to be $584,686.20 for a house.

## Increasing minimum monthly payment by 15%It's no doubt that by increasing the minimum monthly payment by 15% that you save money and it takes less times to pay off the mortgage. By increasing it by 15%, Brent found that it would take 13.35 years to pay off and $229,726 to pay. | ## How much many and time did Brent save?In the image to the left, we saw the amount that Brent would spend if he increased the monthly payment by 15%. By subtracting this total from the original, Brent would save $87,642. He would also save 16.65 years by doing this. |

## Increasing minimum monthly payment by 15%

It's no doubt that by increasing the minimum monthly payment by 15% that you save money and it takes less times to pay off the mortgage. By increasing it by 15%, Brent found that it would take 13.35 years to pay off and $229,726 to pay.

## Works Cited

(2014, January 1). *Reece & Nichols.* Retrieved from http://www.reeceandnichols.com/homes-for-sale/KS/Overland-Park/66207/9350-Lamar-Avenue-109222967.