Patt Azsume hat youve found homeforsale and have peed to purchace ee of $26060, ‘Down Payment esune tet you ate gangtomake a 10% down payment onthe house (termine the amount four sour payment andthe baance to finan Down Payment Loan Amonnt Monthly Payment Csclte he monthly payment or 20 year ioan rourg tothe nearest cer, sorounaingtotwo decal paces) Forthe 3 yar loan ue an anual rest ate oF 3% Frat exes te annualineestrat ae decal ‘Theanmaal intereetratecapremel atadecmmalie( 03 ows ean emul ete mony payment Telenor seat: Poli) (0 -(+8) ) Paiste oghalon amount ‘ithe sua rc ote decom. Jes therumbe of compounding eves none years k Nisthelergth of theloanin yar Moat Paymnd = [m= Ddssumingyaurke the month payment cach mont for3t years, what athe tata amount ee) Fhe total aroun ofitres ald ove the 30 years. To 65, subwacheameunt ory ‘orroned rom the tal payments. Trimet i= ss Caeulate your nome: £5 aedy mentions, these payeats rpc ara irerst ol "Youwil asohave month payment or name surance and propery taxes, ut or thslab YOu wlgnore se nada I i recessarytohave come letove fr athe expense he ‘ery, water fond and the bil Ar aise home oer, you date tat your monthly prinpal anders payment sho nt excesa 35% of our anny ake home ay SoMa yOu Fave let et over fo those other expenses ‘int isimum month ake home pay your monty say checks after taxes should you en Inder treet ths goa? nother words, 35m of what monthly ake hare pay equal your morgage payment? Misinum monthly tkehome pay = 8(38 Ice aes important to note hat your tothe home pay after tans es han your goss pay thstoe tows). Aesuingtha your pt pay 739 of your Bose py, use your marty take-home ayes tate minum gross monn sly il you need eaters this house. en "Now find the minimum annual gross pay you wl need to afordthis house imam anna won pay = A[sn59 | Research: Do search onthe nteratforthe "average aay’ f ether your ture profession Dy yur ture celege degre ana compare wth our lat aver Mates note oe ar yu llRecall ong! purhure pee youcan eek backto Question 1 fyeuneedo, vial rca pric (rom Question 3) = $7} ‘esr fe sh fn veer ih let. you te te congo (ve gy “Ths isjustan approximate, so weltuse an anual compounding period sa k= 1 Frnt utr value ofthe are 10 years after you purchased assuming 4b neresrae Use ‘etl pense pice ofthe home Wom he previous problem Gueston Has teprncpl(o™ eal sve, Pyne compound reas formal, Pw. ==> ‘tye ts epee tt eu ata yr oma fran sto usstone guste thee nyt ae bese i se Beast cance tue secon Voce Toute donmcrttemeon he arent esed mse nets et ee eee tc nar tomeeatSomes os eh oe sree ae oan => “etn peptone morggy lteab aras a0-G+3)") Stave tne truncate suprecce aes decir tom Pare or = Niche number of [ar emaiing on teloan an oeoures 33) Principal ance on mortgage afer 10 years ‘To determine whether or not you've made or lost money, you must compare the expenses" (down payment + morgage pa = principal balance) tthe return" future value ofthe home). ‘Mortenge paid ove 10 years Pe Find the total expenses’ Expenses = $[37123895 ‘ter 10 yess, did you lo or gan money fom saling the house? Answer: on uch yout or ay Anewers [nso‘Part IMl: 15 Year Mortgage Int pat ofthe ab youll examine the values scouted th year morgage, You wile ‘hesamepurchase pre, down payment ane lon mount rom Quest 1 ‘tar by canfieg you have thse coret values ng pine oe (om Quan 1) = 89 9] Loan Amount = {202585 7 Down Payment ‘ypc, he annul inaest te 0n 15 yea loan lower than. on 230 yea lan ‘azure ther ou nave founda ISyear aon whan anal itret ate of 3.03% [iprsethe sonal merentate 23 deems “Theanmual intern ratcexprowed ta decimal [BH ‘As you did forthe 90 year mortgage in Question 1, compa the marth paynentforthe 15 yr ‘gen uz the nan formule find the monthly gaya. d. Theloan formulas ordi mG) (9) Ho what ale wit you use for Ws te? ‘csumirg you make the monthiy payment each mort for 1 years, what il ete ttl arent reps ‘Monthly Payment ‘Tota payments nate ttl amount mers pai ve the 1 yeas To 60 so, subtract the amour orgy Dove rem the toa payment itt pt ¢ fae Compare the total interest pald with this 15 year morgage tothe oa intrest pach the 30 year morgage (Fom Question 1 Frew much would you save in interest fyou use the 18 yar morgage? Diener paid = [nase 9]Part IV: Paying Extra We vsing a 18yeor morgage saves you money on interest compered tothe 30 year morgage, the momthy paymentfor ne Ibyee-oenehgher ranch year good aternsine eto 9 30 year oan, tutto make era payments toward the prinpal Ts aoprosch ges thehomeowner zuma lity (jou can aye the nnmur north payment you crtpay the ete ‘enc aut tesutsin saving money onietret and payinghe oan of quer ‘Toseethe ees of making ext prinipa payments, youl need some information from Queston 1 ‘ec fom Quest, the erigalloen amount was $242640 ante 30 year terest at rprecead ar adecnai a r= BOATS ‘esa that 30 momthy parent fom Question. tshouldhave been approtatey sine. 20 year monthly payment Using this va suppase hat you pay an aditen! $1003 month rove principle You winged to gure cuthow long lust payoff theloan th hs anal payer im orerto doth ou would have t save the folowing ean formula for hich represents yar #(- (ra) “) (a) (ote Py tthe egal ln amour rm Queron 1 and herewehve ued your ment payment pls the aston $100). P= weed’ Inorder to salve the ove equation for N you woul uselogatis Using te notation lg fr the common garttm, you meus get the foloning fos ve( ator) ml a) seth ave formula figure cut the mame of years lake to py ofthe aan te detral $100 payment. Aerntvey, us none arereaton clear such 3s [epulrensheeeinevamansaton/smereze mm, Yeo wll needa ener panes te ann Inrrecrate rom tis queston andthe payment amount ourd’) eave the number felt payers bank arn alte The rumba felt payrts dvded 12 shoul gee (th fromthe mule above Fd N accurate ft decal les dont ued ary moe than WN = [2563 To find the total interest pald you need the number of payments you made (which you elther have ‘or can get from N by multiplying It by 12). You can round the number of payments to the nearest whole number. ‘Total number of regular payments= {308 ¥ Now you can find the total payments and the total Interest paid. Don’t forget to add the additional $100 to your monthiy payment before multiplying by the number of payments. oa pee oe Recall that the total interest paid from Question 1 was $211968. How much do you end up saving in Interest If you pay the additional $100 per month? Save in interest = $[34866.21 Y]