Gia's Finance Project

Colwell- Hour 6

Scenario #2:

Salary of $70000

Paying off $35000 in student loans

Car Payment of $325/month

Buying the house!

Budget For House:

$4083.33-11817.78=2265.55

Possible Monthly Budget: $2265.55

Mortgage Interest Rate: 3.75%

What Can I afford?

PV=2265.55[1-(1+.0375/12)^-12(30)/(.0375/12)]

PV=$489197.52


I will purchase a home for $370,000 so that I do not max out my budget.


Actual Monthly Payment:

370000=R[1-(1+.0375/12)^-12(30)/(.0375/12)]

R=$1713.52

Over the course of the loan I will pay:

$1713.52(12)(30)=$616867.20

I will pay 616867.20-370000=$246867.20 in interest.


If I increased my monthly payment by 15% I would save...

New Payment: 1713.52(.15)+1713.52= $1970.55

How long to pay off?

370000=1970.55[1-(1+.0375/12)^-12(t)/(.0375/12)]

n=147.9739049/12

t=12.3315 years

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Sources:

Zillow (2016, February 15) 13831 Mackey St, Overland Park, KS 66223 retrieved from http://www.zillow.com.

Bank Of America (2016, February 15) Mortgage rates retrieved from http://www.bankofamerica.com.