Jay Hattemer Hr. 4 Scenario 2
Harper's annual salary is $70,000. She has $35,000 dollars in student loans. She also owns a car that costs $325 per month. 30% of her salary is taken out by taxes. After taxes she has a monthly salary of $4083.33. $402.78 is taken out, per month, by student loans, and $325 is taken out for her car. She also has living expenses that amount to $1983.26. These living expenses include insurance, utilities, gas, food, savings, and recreation. The maximum amount she can end up spending is $1,372.29 each month on her house. A good steady thirty-year interest rate determined by Capitol Federal is 4.625%. This puts the maximum value of a house she can afford at $266,910. There just happens to be a lovely 3000 square foot house located in Olathe, Kansas listed for $265,000. At this price she pays $1362.47 per month, around $10 below her maximum amount possible. If Harper increased the amount of money she was paying by fifteen percent, she would end up paying $1566.84. She would end up paying her loans for twenty-two years and eleven months. This ends up saving her $60,673.75.