# Jenny's First Home!

## Monthly Amount

Jenny's annual salary after taxes is \$28,000, so her monthly salary after taxes is \$2333.33. After subtracting out each of the following monthly necessities, the amount of money per month that she can spend on her house payment per month is \$939.84.

• Student Loans per month-\$230.16 (A 200,000 dollar loan on a 6.8% interest rate and on a 10 year fixed rate)
• Car Payment per month- \$230
• Food budget per month-\$233.33 (10%)
• Clothing budget per month-\$116.67 (5%)
• Savings for retirement per month- \$233.33 (10%)
• Entertainment budget per month- \$116.67 (5%)
• Monthly insurance-\$233.33 (10%)

## Total Amount & Minimum Amount

Using the present value equation for the total amount (listed below) the value of a house that she could afford would be \$187638.11 (When using a 4.402% interest rate.) She chose to buy a home that costs \$155,000 though just so that she can have some extra money in case of an emergency. Also, her realtor was able to settle a deal in which no down payment is necessary.

The minimum monthly payment is \$776.36. (Found using the minimum payment equation listed below when the interest rate is a 4.402%.)

## Increased Principle

When the minimum monthly payment (\$776.36) is increased by 15%, the value payed per month increases to \$1080.82.

When using this new monthly payment you would save 17 years and \$117855.12. (equation listed below)