# Finance Project

## Monthly Amount

Jenny makes \$28,000 a year with taxes taken out which gives her \$2333.33 a month. She has to pay off her student loans of \$20,000 in 10 years which means she has to pay \$230.16/mo and she has a car payment of \$230/mo . After all the payments she ends up having \$1873.17/mo left to spend. My mother told me that you should not spend more than 25% of your income on mortgage so Jenny can spend up to \$468.29/mo on a house.

## Total Amount

Jenny can spend \$468.29/mo on a house with an interest rate of 4.625% for a 30-year fixed rate loan. For Jenny to buy a house she can borrow up to \$91,082.28.

## Minimum Monthly Payment

My house costs \$86,400 and once the mortgage has been approved Jenny's minimum monthly payment for her house would be \$444.22/mo. To find that I used an interest rate of 4.625% and plugged in 360 for the number of months, the interest rate, the present value of the house and put it all into my calculator and found the monthly payment.

## Increased Principle

If Jenny paid the minimum monthly payment of \$444.22 she would be paying a total of \$159,919.20 after 30 years for her house. If Jenny increased the minimum monthly payment by 15% she would be paying \$510.85 a month and have it all paid off in 22.86 years. By the end of 22.86 years she would have spent \$140,136.37 for her house, which saves her a total of \$19,782.83.