Jenny's First Home

Pre-Calc Hour 2 Finance Project

Able to Afford Each Month

Jenny's $40,000 salary becomes approximately $28,000 after federal taxes. This means she has an income of $2,333.33 per month. Subtracting $230 for her car payment, and $230.16 for her student loans, Jenny is only able to pay $1873.17 on a house per month. $1,000 is also subtracted to represent other expenses even though a larger amount of money is needed. Jenny able to pay $873.17 each month on her house.

Bank of America gives a 4.625% intrest rate for a 30 year fixed loan

Cost of a House

The 4.625% interest for a 30 year fixed loan and the $873.17 able to spend on a mortgage each month was plugged into the Present Value equation to discover that Jenny is able to buy a house that cost up to $169,831.33

Jenny buys 9675 Reeder StOverland Park, KS 66214 for $124,750

Monthly Payment

Jenny's minimum monthly payment for 30 years is $641.31. If the monthly payment is increased by 15%, Jenny would save $34,635.06


$641.39 x 30 x 12=$230,900.40

$737.60 (15% increase) x 30 x 12=$265,535.46

$265,535.46 - $230,900.4=$34.635.06