Finance Project-Scenario 1

By: Keely Gaeddert

Calculations

Gross Income: $50,000

After taxes (23%): $38500

Monthly Income: $3208.33


Rationale:

  • Food: $250
  • Gas: $50
  • Utilities: $350
  • Cellular: $50
  • Clothes: $200
  • Retirement plan: $150
  • Car Payment: $450
  • Insurance: $150
  • Extra: $100


Overall Rationale Price: $1750

Income after Rationale: $1458.33

30 Year fixed Interest Rate: 3.750% (https://capfed.com/rates/mortgage-rates)

Maximum to be Borrowed: $314,895.47


I will borrow $260,000 dollars from my bank in order to avoid going over my budget. If pay this amount off over 30 years with a monthly payment of $1204.10, by the time I'm 54, I will have paid $433,476.20 overall-- this means that I will have paid $173,476.20 in interest. However, if I increase my monthly payments by 15% (paying $1384.72 rather than $1204.10) than I will be able to pay off my house in 17 years and four months (17.32 years). This means that I would be paying $287,674.11 instead of paying $433,476.20 , thus saving me $145,802.10.

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Amortization Table

  1. Payment
  2. Principal
  3. Interest
  4. Total Interest
  5. Balance
  6. Month



$5.58

$1.81

$3.76

$3.76

$1,202.29

January



$5.58

$1.82

$3.76

$7.52

$1,200.47

February



$5.58

$1.82

$3.75

$11.27

$1,q98.64

March



$5.58

$1.83

$3.75

$15.02

$1,196.81

April



$5.58

$1.84

$3.74

$18.76

$1,194.98

May



$5.58

$1.84

$3.73

$22.49

$1,193.13

June



$5.58

$1.85

$3.73

$26.22

$1,191.29

July



$5.58

$1.85

$3.72

$29.94

$1,189.43

August



$5.58

$1.86

$3.72

$33.66

$1,187.57

September



$5.58

$1.87

$3.71

$37.37

$1,185.71

October



$5.58

$1.87

$3.71

$41.08

$1,183.84

November



$5.58

$1.88

$3.70

$44.78

$1,181.96

December

Refrences

My Dad


FIND YOUR HOME. (n.d.). Retrieved February 15, 2016, from http://reecenichols.reachlocal.net/?utm_source=ReachLocal


Rates – Capitol Federal. (n.d.). Retrieved February 15, 2016, from https://capfed.com/rates/mortgage-rates