Math 1030

Name ____Bethany Quinn_______

Buying a House

Select a house from a real estate booklet, newspaper, or website. Find something reasonable
between $100,000 and $350,000. In reality, a trained financial professional can help you
determine what is reasonable for your financial situation. Take a screen shot of the listing for
your chosen house and attach it to this project. Assume that you will pay the asking price for
your house.

The listed selling price is __$299,900___.

Assume that you will make a down payment of 20%.

The down payment is __$59,980___. The amount of the mortgage is __$1,126/mo_.

Ask at least two lending institutions for the interest rate for both a 15-year and a 30-year fixed
rate mortgage with no points or other variations on the interest rate for the loan.

Name of first lending institution: __America First Credit Union_____.

Rate for 15-year mortgage: __3.25% _. Rate for 30-year mortgage _4% __.

Name of second lending institution: ___Utah First Credit Union____.

Rate for 15-year mortgage: __3.772% __. Rate for 30-year mortgage __4.209% _.

Assuming that the rates are the only difference between the different lending institutions, find the
monthly payment at the better interest rate for each type of mortgage. (P0=299,900)

15-year monthly payment: __$2,107.30__. 30-year monthly payment __$1,431.77___.

These payments cover only the interest and the principal on the loan. They do not cover the
insurance or taxes.

To organize the information for the amortization of the loan, construct a schedule that keeps
track of: (1) the payment number and/or (2) the month and year (3) the amount of the payment,
(4) the amount of interest paid, (5) the amount of principal paid, and (6) the remaining balance.
There is a Loan Amortization schedule in CANVAS.

Its not necessary to show all of the payments in the tables below. Only fill in the payments in
the following schedules. Answer the questions after each table.
15-year mortgage
$
Payment Payment Payment Interest Principal Remaining
Number Date Amount ($) Paid ($) Paid ($) Balance ($)
1. . 4/22/17 $2,107.30 $812.23 $1,295.07 $298,604.93
2. . 5/22/17 $2,107.30 $808.72 $1,298.58 $297,306.34
50. . 5/22/21 $2,107.30 $628.70 $1,478.60 $230,657.33
90. . 9/22/24 $2,107.30 $459.76 $1,647.54 $168,110.87
120. . 3/22/27 $2,107.30 $320.50 $1,786.80 $116,554.39
150. . 9/22/29 $2,107.30 $169.48 $1,937.82 $60,640..21
180. . 3/22/32 $2,101.61 $5.69 $2,095.92 $0.00. .
total ------- $379,314.65 $79,414.65 $299,900 ---------

Use the proper word or phrase to fill in the blanks.

The total principal paid is the same as the ___loan amount__________.
The total amount paid is the number of payments times ___the payment amount____.
The total interest paid is the total amount paid minus __the principal paid____.

Use the proper number to fill in the blanks and cross out the improper word
in the parentheses.
Payment number _1_ is the first one in which the principal paid is greater than the interest
paid.

The total amount of interest is __ $79,414.65_ (more or less) than the mortgage.

The total amount of interest is _9.74_% (more or less) than the mortgage.

The total amount of interest is __26.48__% of the mortgage.

30-year mortgage

Payment Payment Payment Interest Principal Remaining

Number Date Amount ($) Paid ($) Paid ($) Balance ($)
1. . 4/22/17 $1,431.77 $999.67 $432.10 $299,467.90
2. . 5/22/17 $1,431.77 $998.23 $433.54 $299,034.36
60. . 3/22/22 $1,431.77 $905.93 $525.84 $271,252.09
120. . 3/22/27 $1,431.77 $789.72 $642.05 $236,273..09
240. . 3/22/37 $1,431.77 $474.58 $957.19 $141,416.02
300. . 3/22/42 $1,431.77 $263.04 $1,168.73 $77,743.69
360. . 3/22/47 $1,427.01 $4.76 $1,422.25 $0.00. .
total ------- $515,436.65 $215,536.65 $299,900 ---------

Payment number _153_ is the first one in which the principal paid is greater than the interest paid.
The total amount of interest is __ $215,536.65__ (more or less) than the mortgage.

The total amount of interest is ____.281____% (more or less) than the mortgage.

The total amount of interest is ____41.81_____% of the mortgage.

Suppose you paid an additional $100 a month towards the principal

The total amount of interest paid with the $100 monthly extra payment would be
__$186,791.43__.

The total amount of interest paid with the $100 monthly extra payment would be
_$28,745.22____ (more or less) than the interest paid for the scheduled payments only.

The total amount of interest paid with the $100 monthly extra payment would be
____86.66___% (more or less) than the interest paid for the scheduled payments only.

The $100 monthly extra payment would pay off the mortgage in _26_ years and __5_
months; thats _42_ months sooner than paying only the scheduled payments.

Summarize what you have done and learned on this project. Because this is a math project, you
must compute and compare numbers, both absolute and relative values, that havent been
compared above. Statements such as a lot more and a lot less do not have meaning in a
Quantitative Reasoning class. Make the necessary computations and compare (1) the 15-year
mortgage payment to the 30-year mortgage payment, (2) the 15-year mortgage interest to the 30-
year mortgage interest, (3) the 15-year mortgage to the 30-year mortgage with an extra payment,
and (4) the 15-year mortgage to the 30-year mortgage with a large enough extra payments to
save 15 years and have the loan paid off in 15 years. Also, keep in mind that the numbers dont
explain everything. Comment on other factors that must be considered with the numbers when
making a mortgage:

- I have learned a lot from this project. The 15-year mortgage payment was $2,107.30
and the 30-year mortgage payment was $1,431.77, which means that you would pay
$675.53 less each month with the 30-year mortgage payment. At first it seems that it
would be better to have smaller payments each month, but then you look at the
interest. For the entire 15-year mortgage you would pay $79,414.65 in interest, but
with the 30-year mortgage you would pay $215,536.65 in interest. That means you
would pay and extra $136,122 in interest with the 30-year mortgage. Also, if you
were able to pay an extra $100 at every payment it would shorten your payments by
42 months. If you paid around $250 extra each month on the 30-year mortgage you
could be done in 15 years. Overall, I think it would be smarter to do the 15-year
mortgage because you will pay $136,122 in interest. You could buy a whole other
house with that money!

Your submission must be in pdf format. Refer to the assignment rubric to see how you'll be
graded.