First Home Excitement
Hr. 7 Colwell
Jenny the Bank Teller
Salary is $40,000, has $20,000 in student loans after dropping out, and has to pay $230 a month for car payments. Her net annual income is $28,000, so she can afford about 25% of her net income which is $700. Jenny's net monthly income is $2,333.33.
As for paying off her student loans, she must do so in a 10 year span with the current interest rate of 6.8%.
After doing so using the present value formula the resulting monthly payment would be $230.16.
By subtracting the monthly costs of the student loans, car payments, and about $100 for other living costs will be what Jenny has left for the home.
To find out the exact monthly payment of this lovely home use the formula below.
274.296 divided by 12 is approximately 22.858, so Jenny would make the payment about 7 or 8 years quicker. She would also save about $28,637.25.