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Math 1030

Spencer Wescott
Name ______________________________
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.

$449,900
The listed selling price is ____________.

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

$89,980
The down payment is ____________. $359,920
The amount of the mortgage is ____________.

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.

Great American Lending


Name of first lending institution: ___________________________.

3.028%
Rate for 15-year mortgage: ____________. 3.767%
Rate for 30-year mortgage ____________.

UtahLowRate.co
Name of second lending institution: ___________________________.

3.250%
Rate for 15-year mortgage: ____________. 4.000%
Rate for 30-year mortgage ____________.

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.

$3,107
15-year monthly payment: ____________. $2,084
30-year monthly payment ____________.

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 sschedule in CANVAS.

Its 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
15-year mortgage

Payment Payment Payment Interest Principal Remaining


Number Date Amount ($) Paid ($) Paid ($) Balance ($)
1. . 6/20/17 $1,670.32 $1,129.85 $540.47 $359,379.53
2. . 7/20/17 $1,670.32 $1,128.15 $542.17 $358,837.36

50. . 7/20/21 $1,670.32 $1,040.13 $630.19 $330,709.75


90. . 11/20/24 $1,670.32 $955.96 $714.36 $303,811.82

120. . 5/20/27 $1,670.32 $885.53 $784.79 $281,305.88


150. . 11/20/29 $1,670.32 $808.16 $862.16 $256,581.07
$229,418.65
180. . 5/20/32 $1,670.32 $723.16 $947.16 $0.00. .
total ------- $11,692.24 $6,670.94 $5,021.30 ---------

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


The total paid minus the interest paid
The total principal paid is the same as the ______________________.
The Scheduled Payment
The total amount paid is the number of payments times _________________________.
The total Principal payed
The total interest paid is the total amount paid minus ___________________________.

Use the proper number to fill in the blanks and cross out the improper word
in the parentheses.
Payment number _____
140 is the first one in which the principal paid is greater than the
interest paid.

The total amount of interest is $_____________


118,524.98 (more or less) than the mortgage.

The total amount of interest is _____________%


67069076461 (more or less) than the mortgage.

The total amount of interest is _____________%


32.930923538 of the mortgage.
15
30-year mortgage

Payment Payment Payment Interest Principal Remaining


Number Date Amount ($) Paid ($) Paid ($) Balance ($)
1. . 6/20/17 $2,490.39 $908.20 $1,582.19 $358,337.81
2. . 7/20/17 $2,490.39 $904.21 $1,586.19 $356,751.62

60. . 5/20/22 $2,490.39 $654.55 $1,835.84 $257,564.38

120. . 5/20/27 $2,490.39 $354.87 $2,135.52 $138,500.21

240. .
300. .
360. . $0.00. .
total ------- $9,961.56 $2,233.12 $7,139.74 ---------

1
Payment number _____ is the first one in which the principal paid is greater than the interest paid.
271,569.59 (more or less) than the mortgage.
The total amount of interest is $_____________

The total amount of interest is 75.452764503


_____________% (more or less) than the mortgage.

The total amount of interest is 24.547235496


_____________% 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
$__________.
$83,822.93

The total amount of interest paid with the $100 monthly extra payment would be
$___________
4527.48 (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
___________%
5.124458392 (more or less) than the interest paid for the scheduled payments only.

The $100 monthly extra payment would pay off the mortgage in ____
14 years and ____
4
months; thats ______
8 months sooner than paying only the scheduled payments.
Summarize what you have done and learned on this project. Because this is a math project, you
must compute and compare numbers, both absolute and relative values, that havent been
compared above. 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,
and (4) the 15-year mortgage to the 30-year mortgage with a large enough extra payments to
save 15 years and have the loan paid off in 15 years. Also, keep in mind that the numbers dont
explain everything. Comment on other factors that must be considered with the numbers when
making a mortgage.

Your submission must be in pdf format. Refer to the assignment rubric to see how you'll be
graded.

It is very interesting to compare the financial differences presented between the 15-year mortgage
and the 30-year mortgage. I thought it was most interesting that with the 15-year mortgage the first payment
was primarily comprised of money going towards the principal balance as opposed to the interest balance.
Compared to the 30-year mortgage, where it took until payment 140 for the payment to favor the primary balance.
I was also surprised by the impact of adding thing additional one hundred dollar payment each month in
the 15-year mortgage. I was surprised that it took over five percent off the total accumulated interest.
There are additional factors that are important to consider when choosing a bank for a mortgage. Considering
the differences between fixed and adjustable APR, and the positives and negatives of both.