# Amazing house on Bluejacket St.!

## Salary

Brent earns \$50,000 annually.

Income Monthly:

\$4,166.67

Expenses Monthly:

Car payment: \$450

Car Insurance: \$80

Gas: \$100

Utilities: \$300

Phone: \$100

Food: \$250

Entertainment: \$500

Miscellaneous/saving: \$500

Total: \$2,280

Net Income Monthly:

\$1,886.67

## How much can Brent afford?

Brent has enough to afford a \$413,696.88 house! He used the present value equation to figure out that he can afford a \$413,696.88 house with his net monthly income of \$1,886.67! He is going to be taking a 30-year mortgage for the house!

And even better news, The Bank of America has a 30-year fixed mortgage rate of 3.625% !(3/20/2015)

## The Perfect House!

Brent looked for a house in his price range and found the perfect house right on BlueJacket! It wasn't quite as much as he can afford. This beautiful house Brent has found is \$412,400! Using the present value equation, he found out that for this house, it is going to cost him \$1,880.76 a month, leaving him \$5.91 left! :) Unfortunately, he is going to be paying a total of \$677,073.60 after the 30-years, paying \$264,673.60 more than the normal price.

1,880.76(12)(30)=\$677,073.60

## SAVING TIME AND MONEY?!

Brent is pondering whether to increase his monthly payment by 15% to save time and money. So he took his monthly payment of 1880.76 and multiplied it by 1.15, a 15% increase, to get \$2,162.87. By increasing his monthly payment by 15%, he would save 6 years and 4 months, but more importantly she would save \$60,655.65 by paying more each month! To get this, he used the present value equation to find for the value of months it would take. A 15% increase would definitely be worth the time and money!

2,162.87(285)= \$616,417.95

677,073.60 - 616,417.95= \$60,655.65 saved

## Sources

ReeceNichols (2015, March 20). Retrieved March 20, 2015, from

Park-KS-66062-121349642

Bank of America (2015, March 20). Retrieved March 20, 2015, from

Mrs. Colwell

Hour 6