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.
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.
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
(2013). Reece and Nichols. Retrieved from http://www.reeceandnichols.com/homes-for-sale/KS/Leawood/66209/2008-CONDOLEA-Drive-105711475#_
(2014, January 2). Bank of America. Retrieved from https://www.bankofamerica.com/home-loans/mortgage/overview.go