Pre Calc Finance Project
By, Ben L (Stein, 4th Hour)
If Harper's annual income is $70,000 and she pays 30% to taxes, it was easy to find out that she is left with $49,000 per year. Now, to be reasonable I subtracted $6,000 from that total, which means she is allowed a little over $100 each week to spend on gas, groceries, etc. Next thing to take into account was her student loans. I determined that she needed to pay $402.78 each month to pay off her student loan in the ten year period. Now taking the $43,000 left, I divided it by 12 to get the amount Harper can pay each month in loans. This worked out to be about $3593.33 before accounting for the student loan payment or car payment, and $2855.55 after accounting for the student loan payments and car payments. This means Harper can afford a maximum monthly payment of $2855.55 per month on a home mortgage. Using this information, along with a reasonable rate based on 2013 national averages, I determined that Harper could spend up to $598,127.05 on a house of her choice.
R works out to be about $402.78
Max Loan Value
Using a rational percentage rate based on 2013 national averages, PV works out to be an whopping $598,127.05
Interest Rate for the Home
After choosing a home within her price range, Harper's monthly payment works out to be $2,148.37
12829 Catalina Street Leawood, KS 66209
The home Harper chose is well within her price range at $450,000. The interest rate on the home was a very reasonable 4%, meaning that on her 30 year loan, Harper will have to pay a monthly payment of $2,148.37. Therefore, after the 30 year period, Harper will have payed $773,413.20 on her mortgage. Not very appealing. However if she were to up her monthly payments by 15%, meaning she payed $2,470.63 per month, she would end up paying off her mortgage after about 23-and-a-half years. She would end up paying a total of $693,632.60. That means she would save $79,780.60 at the end of her mortgage period.
- Freddie-Mac. (2013, December). 30-year fixed-rate mortgages since 1971. Retrieved from http://www.freddiemac.com/pmms/pmms30.htm
- Vanderweide, M. A. (n.d.). 12829 catalina street leawood, ks 66209. Retrieved from http://www.remax-midstates.com/Home/12829-Catalina-Street-Leawood-KS-66209/HRT/1847015