Brent's Financial Plan

Hour 6 Pre calc finance Project

Brent's Monthly earnings

Brent wants to buy a house in the next few months and needs to figure out the cost of a house he could buy. Brent has an annual salary of $50,000. However, after taxes Brent is only left with $35,000 for his annual income. This means that each month Brent earns exactly $2916.67.
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Brent's Monthly Budget

Brent also needs to take into account his monthly expenses before buying a house. These include: food, car insurance, transportation, gas, utilities, cell phone, and entertainment. Also, he is paying off his car loan of $23,000.00 over a 5 year period with a 6.5% interest rate (so his monthly payment is $450.02). All together his expenses add up to $1537.62 leaving him with 1379.05 left as a potential monthly budget for his future house.
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Brent's new home

Brent now knows that with $1379.05 a month (after expenses) he can buy a home for $297,776.63. However, Brent does not want to max out his budget, so he bought a $260,000 home in Overland park at 6112 W 121st street. Brent also has a 3.75% interest rate for a 30 year fixed rate loan. Therefore Brent is able to pay a minimum monthly payment of 1204.10
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Brent's money saving idea

Brent knows that his minimum monthly payment on his house is $1204.10 which would mean at the end of 30 years he will have paid $433,476. He realizes that he could pay more than that each month and therefore spend less money in the end and spend less time paying it off. Brent decides to increase his monthly payment by 15% up to $1384.72. He ends up saving $41,275 and 6 years and 4 months with his new plan.

Reference slide

APA: Wallace, J. (September 26, 2011). The average cost of food for one person per month is surprising!. Retrieved from

APA: Mcmahon, T. (2012, July 7). Transportation costs made transparent. Retrieved from

APA: Admin, J.(2007 September 24). How much do you spend on gas each month?. Retrieved from

APA: Quin, B.(2016 January 14) Average Cost of Insurance: Car, Home, Renters, Health, and Pet (2016). Retrieved from

APA: Hamilton, A.(2015 July 4). How much should you plan for Utilities?. Retrieved from

APA: Johnson, D.(2012 May 31). What is the average cell phone bill?. Retrieved from

APA: Spector, H. (2015 June 17). What is the average cost of cable tv per month?. Retrieved from

Gold, S.(2016 February 12). House photo number one of twenty-five. Retrieved from this is where I found the 30 year fixed loan rate. 2/12/16 at wells and it was 3.75% for a 30 year fixed rate loan.

By: Andrew Smith