Finance Project Scenario One

By Lexi Pudvan Hour 6

Brent's Financial Situation

Monthly Income: $3050


30 Year Fixed Interest Rate: 4.625%

Maximum Affordable Price: $593,224.19

2657 W 146TH Terrace Leawood, KS 66224

Cost: $407,000

Down Payment (10%): $40,700

Mortgage: $366,300

Financial Plans

Minimum Monthly Payment

Monthly Payment: $1883.29

Elapsed Time: 30 years

Total Money Spent: $677,984.40


$366,300= $1883.29* {[1-(1+.04625/12)^-360]/.04625/12}

$1883.29*360=$677,984.40

15% Increase in Monthly Payment

Monthly Payment: $2165.78

Elapsed Time: 22 years, 11 months

Total Money Spent: $594,051.80


$1883.29*1.15=$2165.78

N=2.742946/12=22.858 years= 22 years, 11 months

$2165.78*274.29 years=$594,051.80

Benefits of Larger Monthly Payment

Time Saved: 7 years, 1 month

Money Saved: $83, 932.60


30 years- 22 years, 11 months= 7 years, 1 month

$677,984.40-$594,051.80=$83,932.60

Citations:

December 23, 2013. Wells Fargo Home Mortage - Today's Rates. Retrieved from

https://www.wellsfargo.com/mortage/rates/?dm=DMIWFHPRAT


January 1, 2014. Reece and Nichols- Homes for Sale- Leawood, KS. Retrieved from http://www.reeceandnichols.com/homes-for-sale/KS/Leawood/66224/2657-W-146TH-Terrace-105246916#_