# Jenny's First Home

### By Anika Rasheed

## What Can Jenny Afford?

Jenny is a bank teller and earns $40,000 a year. She has a car payment of $230 per month and student loans worth $20,000 which she must pay off in ten years. To find out what type of home she can afford, first she has to find out her monthly student loan payment. The interest rate is 6.8%. Using the equation featured, she finds her monthly student loan payment to be $230.17.

30% of Jenny's income will go toward taxes. This means she has $28,000 left for every other expense. | She has to divide $28,000 by 12 months to find how much money she has per month. She has $2333.33. | Then, she has to subtract her monthly car and student loan payments to find how much she has left for all other expenses, including a house payment. After this, she has $ 1873.16 |

30% of Jenny's income will go toward taxes. This means she has $28,000 left for every other expense.

## Jenny's House

## Monthly Payment

## Increased Principle by 15% Comparison

If Jenny increased her monthly payment of $423.34 by 15%, it would become $486.85. | Instead of 30 years to pay off her loan, Jenny would pay it off in 22 years and 11 months. She would shave 7 years and 1 month off her loan time. | With the original monthly payment, Jenny would have ended up paying $152,402.40 total. With an 15% increased principle, she would have ended up paying $133,567.30. She would save $18,835.11 by doing this. |

## Works Cited

*Mortgage: Buy A Home *(2014) Retrieved from https://www.bankofamerica.com/home- loans/mortgage/overview.go

*5716 Metcalf Court *(2013) Retrieved from http://www.reeceandnichols.com/homes-for-sale/KS/Overland-Park/66202/5716-METCALF-Court-102849383