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For the mortgage lab I was asked to find the down payment, total interest paid, and total

amounts spent on a mortgage that 30 years in length with an interest rate of 4.91%. The total cost

of the house that I was given in the example was $245,800. I was then asked to find out if it

would be worth it to sell the house after 10 years with a growth rate of 4% throughout the

housing market, which it was. Then I was asked to find out the difference in doing a 15 year long

mortgage with a 3.84% interest rate compared to doing one that was 30 years with a 4.91%

interest rate, I was also asked if it was more beneficial to do a 30 year mortgage while putting

down extra money with each payment. The most beneficial way to do it seemed to be the 30 year

mortgage making extra payments in my opinion. I used the loan formula as well as the

compound interest formula may times to reach the conclusions that helped me make the

decisions.

As far as practical application, this is the first time in a math class I have actually said to

myself: “This is useful information that I will probably use in the future.” Even though most

financing companies will do the math for you and present different options when you are trying

to buy a home, it is still beneficial to understand how it works so you can decide on your own if

you are in the right place financially to buy a home. Another category that this type of lab would

be beneficial in is to help people understand how important it is to put into a 401k plan at an

early age. It can really put into perspective just how much money you could make just by putting

in a little bit of money to a 401k account and letting it grow with interest.

It would be important as a mortgage broker to know how to use these formulas so that

when you have a potential customer or client requesting your services, you can show them all of

their options and help them make the most informed decision that is best suited for them.
This project definitely changed my opinion about maths usefulness in my life. Before I

would think: “Oh great, I need to do math, this feels like a waste of time.” This project helped

me personally because I want to buy a house one day. It is practical for people that don’t plan on

going into a career that is mathematics based, such as mine (Criminal Justice). I actually enjoyed

this lab and found it useful. It helped me understand how much money you actually need to make

to own a house, and makes me feel better about the major that I am pursuing.