# Harper's Financial Plan

## Harper can afford to pay \$2640.84 per month on a house payment.

Harper's monthly net income is \$3355.55 per month after tax, student loan payments and her car payment. Harper spends \$200 on groceries per month on average, \$67 on car insurance, about \$200 on electric, water and cell phone bills, \$115 on utilities, and \$100 on groceries. After subtracting these costs from Harper's net monthly income, it can be deduced that she can afford to pay \$2640.84 monthly on house payments.

## The total amount that can be borrowed is \$546,359.46 if Harper wants to be able to pay back the loan in 30 years.

The interest rate for the 30 year loan is 4.1%, as found on www.weichert.com on February 5th 2016. The total amount that can be borrowed was found by using the monthly amount that Harper can afford to pay on the house, and the interest rate to calculate the present value of the loan, so she will be able to completely pay it off in 30 years.

## The minimum payment that must be made on a home that costs \$195,000 is \$939.98.

Using the price of Harper's preferred house, as well as the fixed interest rate of 4.1%, the minimum monthly payment necessary to completely pay back the loan in 30 years was found to be \$939.98.

## First Year Amortization

1. Year: 1
2. Payment: \$939.98
3. Interest: \$666.25
4. Principal: \$273.73
5. Balance: \$194,726.27

## If Harper increased her monthly payments by 15% she would save \$35,992.80.

If you find how much money Harper would end up paying over 30 years with the minimum payment, then find out how long she would have to make payments if she increased her payments by 15%, you can subtract her total payment when she increased her monthly installments by 15% from the total amount she would pay at the minimum monthly payments.