Finance Project: Shalice Lott

13002 S AZTEC Circle Olathe KS, 66062

Background About Harper

Harper has an annual salary of $70,000. Thirty percent of that salary goes to taxes. As a result, Harper actually receives $49,000 annually. She also has $35,000 in student loans, and a car payment of $325 per month. With all of these things accounted for, she was able to find a home that fits her financial situation. Within 3 months she was able to pay the down payment of this home.

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BREAKDOWN OF MONEY AVAILABLE

$49,000 a year / 12 months = $4,083.33 a month

$4,083.33 - ($402.78 [10 year Student Loan] + $325 [Car Payment])= $3,355.55 a month





MONEY AVAILABLE WITH HOUSE PAYMENT INCLUDED

Since Harper waited 3 months to purchase her home, she accumulated $10,665.65 as a result of her $3,355.55 a month. From the $10,665.65 she took 5% ($7898.00) of it and put it towards her down payment for the home. After the down payment she then acquired a monthly payment towards her 30 year loan of $157,950 which would fully pay off her house. The 30 year loan which was provided by Bank of America has a rate 4.625%. The minimum monthly payment would be $812.08, the most that Harper would be willing to spend monthly on her house payment would be $1,000.00 because she would like to put the remaining money towards other expenses.



$812.08 X 15% increase = $121.81

$121.81 + $812.08 = $933.90


If $933.90 was the monthly payment, it would take 22 years to pay off the loan. Which would save Harper $45, 799.20.

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LOAN EQUATION ^