PreCalc Finance Project- Scenario 2

Stella Atzenweiler

I was given scenario 2, in which my person earns $70,000 a year. With taxes taken out of that, I am given $49,000 a year, or about $4,000 per month.

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She also has $35,000 in student loans that have to be paid back within 10 years with an interest rate of 6.8%. After plugging it into the equation above, I found that the monthly payment on the student loans would be $402.78.

Monthly Amount

After subtracting the $402.78 from the student loans and the $325 from the monthly car payments from the $4,083 per month, we are left with $3,355.22 to spend. I am allowing myself to spend at most $1500 per month on a mortgage in order to have enough for other expenses.

I found a townhouse that is priced at $194,900. After putting a 10% down payment, I would have to borrow $175,410.

Minimun Monthly Payment

I found the interest rate for a fixed 30 year loan from the Bank of America website to be at 4.625%. After plugging in the numbers into the equation below, I found the minimum monthly payment to be $901.85.
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Increased Principle

If the monthly payment were to be increased by 15%, it would take approximately 22.6 years to pay off the house and you would save about $43,520.80

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APA Citations