# PreCalc Finance Project- Scenario 2

## 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.

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.

## 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.

## 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