How much total interest would you pay for the loan

Reference no: EM132265355

Math Project - Mortgage Loans

Introduction - You will find a home for sale in the Metropolitan Detroit area that you would like to buy. You can browse sites like Zillow or Realtor to find some listings of your interest. Keep in mind things like your budget, your income, the taxes on the house to see if you afford buying this house.

In your citations, record the asking price of the home, and record where you found the house for sale. If the home is on the MLS system, then record the MLS number. You will also need to include a picture of the house with the description of the number of bedrooms, bathrooms, square footage, and the lot size.

When buying a house there is usually some negotiation involved. There are also fees to make sure the property is owned by the seller, fees to the company issuing the mortgage, fees to an appraiser, fees to the county, and so on. For this project we will assume that the seller has agreed to pick up the fees and that you agree to pay the asking price.

Assume that you will finance 80% of the asking price of the home. Find a bank that is offering both 30-and 15-year fixed-rate loans with no points. Record the rates. In your citations, record where you found the rates, and record the date on which you found them.

Throughout this project, report all monetary values to the nearest cent. You will be using Excel Spreadsheets to find your answers.

PART I -

Using an initial principal of 80% of the purchase price, a 360-month term (30 years), and the interest rate you found for a 30-year loan, create an amortization table for the loan. Label your columns Month, Interest Payment, and Principal Payment. You must use a spreadsheet, not a website (other than a spreadsheet webpage such as Google Sheets). Put this table into the first tab of your spreadsheet and label the tab "30-year." You may, of course, check your work on a lender's website.

How much total interest would you pay for the loan?

To the nearest whole percent, what percent of your payments would go to interest?

PART II -

Using an initial principal of 80% of the purchase price, a 180-month term (15 years), and the interest rate you found for a 15-year loan, create an amortization table for the loan. Label your columns Month, Interest Payment, and Principal Payment. Again, you must use a spreadsheet. Put this table into the second tab of your spreadsheet and label the tab "15-year."

How much total interest would you pay for the loan?

To the nearest whole percent, what percent of your payments would go to interest?

How much less interest would you pay than you would have for the 30-year loan?

Does anything surprise you about the last two answers? Explain why or why not.

PART III -

Using an initial principal of 80% of the purchase price, a 360-month term (30 years), and the interest rate you found for a 30-year loan, create an amortization table for the loan assuming that you pay an extra $500 per month toward principal above what is required. Label your columns Month, Interest Payment, and Principal Payment. Again, you must use a spreadsheet. Put this table into the third tab of your spreadsheet and label the tab "Extra Payment." STOP YOUR SPREADSHEET WHEN THE PRINCIPAL FALLS TO $0 OR BELOW.

How much total interest would you pay for the loan?

To the nearest whole percent, what percent of your payments would go to interest?

How long would it take to repay the loan?

How much less interest would you pay than you would have without the extra payment?

Does anything surprise you about your answers to the previous two questions? Explain why or why not.

Except for the tables, use complete sentences organized into paragraphs to give your answers. Do not number your answers.

Note - Sent the price of the house but please use 4.625 interest rate.

Attachment:- Assignment File.rar

Reference no: EM132265355

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Reviews

len2265355

3/25/2019 12:06:43 AM

Your project write-up, minus the tables, may be submitted either as a printed document or an electronic document. Your tables must be submitted electronically in a single spreadsheet with three tabs as outlined above. Entitle the sheet [Your Name] - Project Tables. Send the spreadsheet, from your Hawkmail account in an email with subject "Math 131-02 Project." (Use that same message to submit the entire project electronically if you choose to.)

len2265355

3/25/2019 12:06:37 AM

Rubric - 10 Points for College-Level Work: The project is word-processed and not handwritten. The project looks like considerable time and care went into its presentation. Your name is typed onto every page of your project. 20 Points for Grammar and Clarity: There are few or no grammar or spelling errors. Complete sentences are used when explaining answers. Your sentences are organized into paragraphs with a common theme. I can understand what you are trying to state.

len2265355

3/25/2019 12:06:32 AM

10 Points for Sources: Cite your sources in a way such that I can find your source. MLA or APA have citation guidelines you can use to make sure your citation is complete. 60 Points for Mathematical Content: Tables (30 points) - The amortization tables you present show each month. The values are accurate. Columns are labeled. You do not just print out from a website. Answers (20 points) - The answer to each question is accurate. The process for finding it is clearly explained. Analysis (10 points) - You answer all the questions asked in the project description. You support your opinions with mathematical fact or research.

len2265355

3/25/2019 12:06:26 AM

Instructions: I also sent the price of the house but please use 4.625 interest rate. With the wide variety of homes and interest rates available I would be very surprised to see two projects that are the same. You may support one another with explanations of how to do the work, but each student should do his or her own project.

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