Jenny Was a Friend Of Mine

Finance Project Scenario #3

About Jenny:

She went to college for two years, and then dropped out. By the time she dropped out of college, she had $20,000 in student loans. She has been working as a bank teller for the last three years. Her salary is $40,000 per year. She also has a car payment of $230 per month. She is excited to buy her first home.


Starting with the $40,000

We will take out the taxes needed to be paid, typically 30% of the salary, which gives us $28,000 a year to work with. Then save $10,000 to pay for food, gas, and etc., bringing the total amount leftover at $18,000 per year or $1,500 per month. Now, taking out the car payment and student loan payments from the $1,500, we will have a final monthly amount that can be spent.


The Minimum Monthly Payment is $1,039.84

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This Overland Park House costs $140,000

After using the Finance App on my calculator, I found that the minimum payment for the house would be $719.80. Now, if we add the 15% to the initial payment the new minimum payment would become $827.77. This addition of 15% will save 85 months or approximately 8 years on the payments for the house. Then by taking the initial minimum payment multiplied by the time saved, we can approximate the amount of money that was saved as well so, 719.8 x 85=$61,183 saved.


References:

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