Financial Fun

PreCalc Finance Project... Michael Rohledder Hour 3

Afford Monthly

I decided that I could spend $1750.00 monthly on my house based on my monthly income of $3355.55. I reached that monthly income by taking 30% of my $70,000 income for taxes, so I was left with $49,000 or $4083.33 monthly and after student loans and car payments totaling $727.78 per month I was left with $3355.55 per month. After I did research I decided that I should spend 30% of my gross income (before taxes) on housing, which equaled $1750 maximum for housing. I decided that was a good amount because I am living alone and that gives me $1605.55 a month leftover for all other necessities.

Afford to Borrow

Using my finance app I found that I could borrow a maximum of $313,110.000 for housing. I reached this number using my maximum monthly payment of $1750, I found an interest rate of 4.75% (Wells Fargo). When I found a house that I liked for $300,000 I plugged that in as my present value and then I found that I could borrow $313,110.00, although I only borrowed $250,000 because the house I found was only $300,000.

Minimum Mothly Payement

Using my finance app again I reached my minimum monthly payment of $1564.43 based on a house of $300,000, interest rate of 4.75%, and payments monthly for 30 years.

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Minimum Monthly Payment + 15%

My minimum monthly payment + 15% equaled $1799.99. Using this number plugged in to the present value formula with the variable "t" unknown I found "t" to equal 22.7 years or 22 years and 8 months. Therefore, cut off 7 years and 4 months of house payments and I would end up saving $72,043.23. It would be a tough decision to up my payments because I would have to be extremely careful with my money because it is over my maximum monthly payment.


Fargo, W. (2014). Rates and payments results. Retrieved from

Zillow. (2014). Zillow find your home. Retrieved from