# Finance Project Scenario One

## Part I

220,000=R[(1-(1+.04734/12)^-30*12]/(.04734/12)

Approximate Monthly Payment=\$1,125 per month, after taxes you can afford to pay for a house that is about \$215,000 which would allow for a monthly payment to be around \$1,125 a month.

Approximate Borrowing Amount=\$160,000, you take the interest rate multiplied by the 30 year fixed rate mortgage multiplied by the amount you can pay per month.

Interest rate=4.734%, the interest rate is around 4.75% and to find an exact one you find a bank's website that can give you the interest rate for a 30 year fixed rate mortgage.

Approximate Minimum Monthly Payment= \$1,000, you take the borrowing amount divided by 30 years then divided by the interest rate.

Approximate Increased Minimum Monthly Payment= \$1,300, saves almost \$34,000 when increasing the monthly payment by 15%.

## APA citations

Bank of America.(2014, January 2). Mortgage Rates & Loans. Retrieved from https://

RE/MAX. (2014, January 2). Properties for sale in Overland Park, KS. Retrieved from

http://www.remax-midstates.com/Home/11105-W-114-Street-Overland-Park-KS-

66210/HRT/1842054/