Math

1030 – Signature Assignment

Math has always been a subject I’ve struggled in. With the way I process

information, I do best in subjects where I can see the real life applications. For most

of my education, math has failed to relate to me in that way. 1030 is the first class

where all of the material easily clicked for me, as I was able to understand the

problems in different contexts.

Numerical thinking and equations apply to many facets of the medical field

where I work. I use equations to determine accurate dilution and dosing of

medications. More complex equations are utilized to determine titration, flow and

drip rate. Proper use of these medications can be the difference between life and

death, especially in administration of cardiac drugs under my ACLS license. Staying

well practiced with mathematics will help me improve the care and response time I

have in treating life-threatening emergencies. 1030 definitely helped me relate to

math better, and create a stronger framework to rely on, which in turn will improve

my performance and help all of my patients.

 Math 1030

Buying a House

Name Adrian Vigil, Arturo Loayza, Nina Yu

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 screenshot of the listing for
your chosen house and attach it to this project. Assume that you will pay the asking price for
your house. Your submission must be in pdf format, submitted in Canvas. I will not accept
assignments not submitted correctly. I will not accept e-mailed assignments. Refer to the
assignment rubric to see how you'll be graded.

The listed selling price is $349,900 . Assume that you will make a down payment of 20%.

The down payment is $69,980 .The amount of the mortgage (loan) is $279,920 .

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: Wells Fargo .

Rate for 15-year mortgage: 4.390% . Rate for 30-year mortgage 4.799% .
Name of second lending institution: Chase Banking .
Rate for 15-year mortgage: 4.061%. Rate for 30-year mortgage 4.597% .

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.

15-year monthly payment: $2079.10 . 30-year monthly payment $1434.49 .

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.

It’s 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 Date Payment Interest Paid Principal Paid Remaining

Number Amount ($) ($) ($) Balance ($)

1. 7/22/2018 $2,079.10 $947.30 $1,131.81 $278,788.19

2. 8/22/2018 $2,079.10 $943.47 $1,135.64 $277,652.56

50. 8/22/2022 $2,079.10 $743.53 $1,335.57 $218,373.22

90. 12/22/2025 $2,079.10 $550.28 $1,528.82 $161,075.74

120. 6/22/2028 $2,079.10 $387.20 $1,691.90 $112,724.71

150. 12/22/2030 $2,079.10 $206.73 $1,872.37 $59,216.18

180. 6/22/2033 $2,079.10 $7.01 $2,065.08 $0.00

Total (over the ------------------ $374,238.29 $94,318.29 $279,920.00 ------------------

entire loan)

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

The total principal paid is the same as the Cumulative pay minus the total interest/the original
loan amount .
The total amount paid is the number of payments (180) times the scheduled payment
amount(interest+principal) .
The total interest paid is the total amount paid minus the principal paid.

Payment number 1 is the first one in which the principal paid is greater than the interest paid.

The total amount of interest is $185,601.71 (more or less) than the mortgage.
The total amount of interest is 66.31% (more or less) than the mortgage.
The total amount of interest is 33.7% of the mortgage.
30-year Mortgage

Payment Payment Date Payment Interest Paid Principal Paid Remaining

Number Amount ($) ($) ($) Balance ($)

1. 7/22/2018 $1,434.49 $1,072.33 $362.17 $279,5557.83

2. 8/22/2018 $1,434.49 $1,070.94 $363.55 $279,194.28

60. 6/22/2023 $1,434.49 $980.68 $453.81 $255,542.14

120. 6/22/2028 $1,434.49 $863.66 $570.83 $224,878.23

240. 6/22/2038 $1,434.49 $531.31 $903.18 $137,790.68

300. 6/22/2043 $1,434.49 $298.42 $1,434.49 $76,763.53

360. 6/22/2048 $1,434.49 $5.47 $1,423.54 $0.00

Total (over the ------------------ $516,417.22 $236,497.22 $279,920.00 ------------------
entire loan)

Payment number _180_ is the first one in which the principal paid is greater than the interest
paid. The total amount of interest is $_43,422.77_ (more or less) than the mortgage($279,920).

The total amount of interest is __15.51____% (more or less) than the mortgage.

The total amount of interest is ____84.49______% 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 $_201,689.59_.

The total amount of interest paid with the $100 monthly extra payment would be $ 34807.63
(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 __14.71___%
(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 __2__ months;
that’s __46__ months sooner than paying only the scheduled payments.

Written Responses:
Make the necessary computations to answer the following (because this is math class, values
should be precise – don’t just say more than, less than, about double, etc):

1) How does the monthly payment for the 15-year mortgage compare with the monthly
payment for the 30-year mortgage (provide the absolute and relative difference)?
The 15-year mortgage monthly payment has an absolute difference of $644.61. This is higher due to
the shortened term of the loan. As a relative amount, the payment is 45% higher than the monthly
for the 30-year loan. Monthly payments for the 15-YR and 30-YR are $2079.10 and $1434.49,
respectively.

2) Compare the total amount of interest paid for both the 15-year mortgage and the 30-year
mortgage (provide the absolute and relative difference).
The interest that accumulates for the 30-YR loan is much higher than the 15-YR. The absolute
difference in interest paid is $142,178.93. As a relative amount, the 30-YR loan results in 150%
more interest paid.

3) Compare the monthly payments and the total paid for the 15-year mortgage (no extra
payment) and the 30-year mortgage with the $100 extra payment (provide the absolute
and relative difference).
The absolute difference in the monthly payment on a 15-YR mortgage, and the monthly on a 30-YR
mortgage with an extra $100 every payment is $544.61. The 15-YR monthly payment is 35%
higher than the 30-YR plus $100. This results in an absolute difference of total paid at
$107,371.30. The 30-YR loan with an addition $100 paid each month still ends up being 29%
higher in total than the 15-YR loan.

4) Summarize what you have learned. Keep in mind that the numbers don’t explain
everything. Comment on other factors that must be considered with the numbers when
choosing a mortgage.
○ For our group, it was definitely eye-opening to see the differences in loan terms, and the
amount that interest accumulates. Financial literacy was not always taught well to our
generation, so being able to see all the implications of mortgages is extremely helpful in
informing our decisions to purchase housing. Additionally, growing up during the
recession, most of our generation saw repercussions from the housing crisis affect our
families or people we know. Understanding the difference in 15-YR and 30-YR
mortgages will definitely help us down the road.
○ While a 15-YR mortgage makes the most financial sense on paper, it doesn’t always
work the best for everyone. Higher monthly payments reduce the liquid capital that
people have, which can result in hardship. This loss in liquid capital can reduce
someone’s ability to diversify investments, or handle other types of bills. In the end, a
person has to understand their financial situation well before making a judgment on the
right loan terms for them.
 (Wells Fargo is
the one with the red
text, and the other is
Chase Banking)