Savanna Smith

Mrs. Meyer

Math 1030

Mortgage Lab Signature

In this lab, I compared the differences between a 30 year plan, 15 year plan, and 30 year

with extra payments plan. I learned the steps that had to be taken when loaning money from the

bank and buying a house. To find all of the costs for loaning, the interest cost, monthly

take-home we used the loan formula and the compound interest formula. We used different

percentages according to the monthly, quarterly, and annual interests.

I absolutely think that this lab shows how math is applied to the real world. At this point in

time, the majority of people are starting to have to think about saving money for owning a home

one day. By going through these steps to solve this four part lab, it shows really how much

saving and money you need to have. It makes the situation more realistic and will also help you

be able to calculate these numbers when you are in the situation.

Another application where this type of analysis would be beneficial is financial literacy. In

this class, you do learn about loaning, buying homes, and mortgages but you never learn how to

calculate that or how much money that really is and how much thought has to go into it.

Learning the equations will even help them understand compound interest even more and the

other topics discussed in the lessons.

If I were a mortgage broker, this would be super important to explain the details of this

project to clients so that they could understand all the layers of buying a home like their loan

plan, monthly payments, interest, etc. It would be super helpful for my clients to know the steps

and have the experience and knowledge.

The difference between the 30 year and 15 year plan was that the monthly payment is

higher which can be a con but in the end the interest compound will be lower which is a big pro.
The difference between the 30 year plan and the 30 year plan with extra payments plan will

obviously be higher monthly payments which can lead to stress. On the positive side though,

the total interest will be lower. The better option could be to choose the 30 year plan but just

make extra payments whenever you could or chose, so that if there was a hard patch you

wouldn't have to struggle to have to pay the extra money with the 30 year plan with extra

monthly payments.

I already knew math is super important and will be used later in life. There may be some

things in math that may not be used depending on your profession but these financial formulas

will always be used and important to know or at least understand. One day you may end up

buying a house and need to loan money from the bank and have learned this will be so helpful

with that. Even if you never end up buying for some reason and just rent, it is still so convenient

to know how to find your monthly payment and know how much to take out for retirement.

The future profession I am planning to be in is business management and marketing.

The average salary for this position is $88,884 per year. The minimum annual gross pay for this

house is $55,579.56. This means that I would be able to afford to buy this house. This means

that buying this house does not change my views on buying this house or make me want to

switch my profession.