Finance project

Scenario 1

Introduction

Brent would like to buy an house. He earns an annual salary of $50000. The last days he purchased a new car of $23000 with a 6.50% 5 years car loan. He decides to pay back the loan in 10 years with an interest rate of 6.8%

Costs

He will pay monthly a PMT of $575.401 for a total payment of $69048. In the while he will continue to pay every month:

food $500

gas $50

car insurance $113

utilities $200

cell phone $35

entertainement $400

new car payment $450.02

Chooses

Brent, chousing this house, could gain $19148.

By the way he could also buy an $69048 house and increasing per month 15% of the monthly payment. So Brent could think about paying $661.711 per month for 8 years and 6 months.