Beruflich Dokumente
Kultur Dokumente
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.
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.
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 an MS excel file included on our
CANVAS page if you are using a PC or you can also use any online programs that
are available such as the one on Brett Whissle’s website
http://bretwhissel.net/cgi-bin/amortize if you are using a MAC.
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.
30-year mortgage
.
$1,147. $869.4 $277.7 $219,3
2. 11/ 20 2 9 65.52
01/
18
.
$1,147. $435.9 $711.2 $109,4
24 11/ 20 2 8 16.45
0. 01/
38
.
- $193,0 $219,9 -
tot - 74.46 20.00
al
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The total amount paid is the number of payments times- ___the payment each
month______________________.
The total interest paid is the total amount paid minus _____principle paid_______.
Use the proper number to fill in the blanks and cross out the improper word in the
parentheses.
Payment number 186_____ is the first one in which the principal paid is greater
than the interest paid.
The total amount of interest is $____$26568.85___ (less) than the mortgage.
15-year mortgage
.
01/01/ $320.9 $1,333. $89,28
12 28 $1, 4 47 4.96
0. 654
.41
.
- $77,87 $219,9 -
tot - 3.92 20.00
al
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Payment number __-___ is the first one in which the principal paid is greater than
the interest paid.( it was always greater)
The total amount of interest paid with the $100 monthly extra payment would be
$_158056.83_________.
The total amount of interest paid with the $100 monthly extra payment would be
$__35017.63_________ (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
___18________% (more or less) than the interest paid for the scheduled payments
only.
The $100 monthly extra payment would pay off the mortgage in _25___ years and
__4__ months; that’s __64____ months sooner than paying only the scheduled
payments.
Summarize what you have done and learned on this project in a well written and typed
paragraph of at least 100 words (half page). Because this is a math project, you must
compute and compare numbers, both absolute and relative values. 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
(3) the 15-year mortgage to the 30-year mortgage with an extra payment
Also, keep in mind that the numbers don’t explain everything. Comment on other factors
that must be considered with the numbers when making a mortgage.
1.) I want to use a 30 year mortgage rather than a 15 year mortgage because the principle
payment is the same for each loan. So the difference between each loan is the amount I
pay each month. With the 30 year mortgage I’m paying $1,147.20 a month and with the
15 year mortgage I’m paying $1,654.41 a month. Depending on my situation I will most
likely use the 30 year mortgage because I can’t afford the monthly payments of the 15
year mortgage.
2.) In terms of interest I want to use the 15 year mortgage because it means that I only pay
$77,873.92 of interest versus the 30 year mortgage where I have to pay $193,074.46 of
interest.
3.) If I pay $100 each month extra to the 30 year mortgage I would still want to use the 15
year mortgage because I pay $77,873.92 of interest versus the new 30 year mortgage
where I have to pay $158,056.83 of interest.