Math 1030

Name ___________Garrett Kolling____________

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.

The listed selling price is __$299,900______.

Assume that you will make a down payment of 20%.

The down payment is ____$59,980____. The amount of the mortgage is

____$1,245/mo____.

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: __________AimLoan_________.

Rate for 15-year mortgage: ____4.154%___.Rate for 30-year mortgage

____4.767%___.

Name of second lending institution: _________CitBank___________.

Rate for 15-year mortgage: ___4.481%_____. Rate for 30-year mortgage

____5.055%_____.

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: ____$1,268____. 30-year monthly payment
____$887_____.

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

Payment Payment Payment Interest Principal Remaining

Number Date Amount ($) Paid ($) Paid ($) Balance ($)

1. ​. 12/1/18 $1,254.00 $953.08 $300.91 $239,619.09

2. ​. 12/31/18 $1,254.00 $951.89 $302.11 $239,316.98

60. ​. 10/31/23 $1,254.00 $873.78 $380.21 $219,577.23

120. ​. 10/31/28 $1,254.00 $771.67 $482.32 $193,771.33

240. ​. 10/31/38 $1,254.00 $477.83 $776.17 $119,507.53

300. ​. 10/31/43 $1,254.00 $269.38 $984.61 $66,827.49

 360. ​. 10/31/48 $1,254.00 $4.96 $1,244.07 $0.00 ​.

total ------- ---------- $211,518.52 $451,438.52 ---------

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

The total amount paid is the number of payments times _360__the monthly

payment__$1,254__.

The total interest paid is the total amount paid minus ___$662,957.04__total principal
paid__$451,438.52__.

Use the proper number to fill in the blanks and cross out the improper

word in the parentheses.

Payment number __187__ is the first one in which the principal paid is greater than

the interest paid.

The total amount of interest is $___$28,401.48__ (less) than the mortgage.

The total amount of interest is _____88.162__% (less) than the mortgage.

The total amount of interest is ___11.838__% of the mortgage.

15-year mortgage

Payment Payment Payment Interest Principal Remaining

Number Date Amount ($) Paid ($) Paid ($) Balance ($)

1. . 12/1/18 $1,793.23 $830.52 $962.71 $238,957.29

 2. . 1/1/19 $1,793.23 $827.19 $966.0 $237,991.25

50. . 1/1/23 $1,793.23 $652.89 $1,140.34 $187,466.57

90. . 5/1/26 $1,793.23 $483.85 $1,309.38 $138,465.57

120. . 11/1/28 $1,793.23 $340.82 $1,452.41 $97,004.31

150. . 5/1/31 $1,793.23 $182.17 $1,611.06 $51,014.03

180. . 11/1/33 $1,793.23 $6.19 $1,787.05 $0.00

total ------- ---------- $82,861.66 $322,781.66 ---------

Payment number _1__ is the first one in which the principal paid is greater than the interest

paid.

The total amount of interest is $____157,058.34___ (less) than the mortgage.

The total amount of interest is ____65.463____% (less) than the mortgage.

The total amount of interest is ____34.537____% of the mortgage.

Notice how the 15-year mortgage reduces the amount of interest paid over the life of the

loan. Now consider again the 30-year mortgage and suppose you paid an additional $100 a

month towards the principal [If you are making extra payments towards the principal,

include it in the monthly payment and leave the number of payments box blank.]
 The total amount of interest paid with the $100 monthly extra payment would be

$___76,449.58___.

The total amount of interest paid with the $100 monthly extra payment would be
$___163,470.42___ (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
____68.135___% (less) than the interest paid for the scheduled payments
only.

The $100 monthly extra payment would pay off the mortgage in _14_ years and
_0_ months; that’s __12__ 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

(1) the 15-year mortgage payment to the 30-year mortgage payment

(2) the 15-year mortgage interest to the 30-year mortgage interest

(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.
 In this mortgage simulation, several factors went into finding the better payment
option. These include interest rates, monthly payments, and the time period over which the
mortgage would be paid. First, the payment of the 15 year mortgage ($​322,781.66)​ was
$128,656.86 less than the 30 year mortgage ($​451,438.52)​. Next, the total interest paid
over the course of the 15 year mortgage($82,861.66) was also $128,656.86 less than the 30
year payment option ($211,518.52) . Lastly, with the extra payment of $100, the total
interest over 30 years ($76,449.58) was $135,068.94 less than that of the original 30 year
payment plan. In conclusion, the 15 year mortgage is more cost-effective in total payment,
total interest, and time.

https://www.zillow.com/homes/for_sale/Sandy-UT-84093/pmf,pf_pt/12884420_zpid/9
4456_rid/globalrelevanceex_sort/40.627275,-111.785331,40.571229,-111.866012_rect/
13_zm/