Finance Project

Rebecca Zhang

Scenario 1

Monthly salary (after tax): $3125


Monthly costs

food: $400

gas: $150

car insurance: $50

utilities (power, water, natural gas): $200

clothing: $100

cellphone/entertainment (internet, TV): $250

car payment: $450

TOTAL: $1600


Monthly amount: $1525

Minimum payment: $1312.89

Total amount: $275,000

Although, Brent is able to afford a $300,000 home, it may not be the best decision. With a more expensive home, he will not be able to pay higher than the minimum payment. If he chooses a slightly less expensive house, he could save a significant amount of time and money.


Interest rate: 4.000%

website: http://www.zillow.com/mortgage-rates/ks/overland-park/#quote=ZQ-BJKXVFCC&request=ZR-FRRVVJW

date: 3/21/15


Minimum payment (increased by 15%): $1509.82

Time saved: 30 years - 23.4 years = 6.6 years

Money saved: $472640.40 - $423881.97 = $48,758.43

Because the monthly payment is slightly increased, the buyer will be paying less interest overall. This will significantly benefit him in the long run since he will have decreased the total amount of money spent (less interest + less monthly payments).

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First Year Amortization

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