Sunteți pe pagina 1din 3

Logan Harrison

P: 2
Math 1050 Mortgage Project
You have agreed to purchase a house for $201,000.
The down payment is $20,100.
The mortgage amount is $180,900.

Find the monthly payment for a 30 year mortgage.
The annual interest rate in 4.975%.
PMT=(180900)(.04975/12)/1-(1+.04975/12)^-12(30)
The monthly payment for a 30 year mortgage is $968.35.
The total interest paid over 30 years is $167,704.53
The total amount paid is $348,604.53
- The more payments that are made, the interest is less and the payment remains the same.
- # of first payment when more of payment goes toward principal than interest #194.

Homes require luxuries such as insurance, electricity, etc. As a wise home owner you decide that
your monthly principal and interest payment should not exceed 35% of your monthly take home
pay. What monthly income pay should you have in order to meet this goal?
$968.35 = .35x
Minimum monthly income = $2,766.71

It is also important that your net take home pay is less that your gross pay. Assuming that your
net pay is 73% of your gross pay, what minimum gross annual salary will you need to make to
have the monthly net salary stated above?
$2,766.71 = .73x
X = 3790.01
12(3790.01) = $45,480.12 = Minimum gross annual salary.

Selling the house.
After 10 years of living in the house you want to sell. Use continuously compounded interest.
10 years after purchase with continuous interest of 4%.
201,000e^.04(10)
Value of home 10 years after purchase = $299,856.76

Assuming that you can sell your house for this price calculate the gains or losses.
Sell price $299,856.76
Original down payment $20,100
Mortgage paid over 10 years $116,202
Principal balance on your loan after 10 years $147,036.48
Do you gain or lose money?
Total cost $283,338.48
299,856.76
-283,338.48
You gained $16,518.28.

Calculate the monthly payment for a 15 year mortgage.
Annual interest rate of 4.735%
PMT = 180,900(.04735/12)/1-(1+(.04735/12)^-12(15)
Monthly payment for 15 year mortgage $1,405.70

Total interest paid over 15 years $72,126.00
Total amount paid $253,026.00
Number of first payment when more of payment goes toward principal than interest #5.
Suppose you paid an extra $100 toward the principal each month. How long would it take to pay
off the loan and how will this affect the total amount of interest paid on the loan?
Length of time to pay off loan with additional payments = 13 yrs + 7 months
Total interest paid over life of the loan = $64,713.29
Total amount paid with additional payments = $245,613.29
You spend less by $7,412.71

Reflection
This project showed me how simple buying a home can be when you can do the math. Math
calculations can be extremely helpful in real life situations. This project greatly opened my eyes
and showed me how the financial work on buying and selling homes can be done.

S-ar putea să vă placă și