Math 1030

Name ______Jessica Ilinkova______

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 ____290,000________.

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

The down payment is __58,000_______. The amount of the mortgage is 232,000______.

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: _______sebonic__________.

Rate for 15-year mortgage:_____3.14%__. Rate for 30-year mortgage 3.725%______.

Name of second lending institution: Quicken Loans___________.

Rate for 15-year mortgage: 3.68%_____. Rate for 30-year mortgage 4.39%______.

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: _1617.82__. 30-year monthly payment __1071.14___.

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 are many programs online available for this including Brett Whissles website:
http://bretwhissel.net/cgi-bin/amortize.
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.

15-year mortgage

Payment Payment Payment Interest Principal Remaining

Number Date Amount ($) Paid ($) Paid ($) Balance ($)
1. . 2/1/17 1617.82 607.07 1010.75 230989.25
2. . 3/1/17 1617.82 604.42 1013.39 229975.86
50. . 3/1/21 1617.82 468.99 1148.83 178082.71

90. . 7/1/24 1617.82 342.40 1275.42 129578.63

120. . 1/1/27 1617.82 238.39 1379.43 89724.32
150. . 7/1/29 1617.82 125.89 1491.92 49619.60
180. . 1/1/32 1612.82 4.22 1609.37 $0.00. .
total ------- ---------

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

The total amount paid is the number of payments times ____291207.60_____.

The total interest paid is the total amount paid minus _mortgage loan __so its 59207.60_.
(says on the schedule it Is 59207.01 but when I did the actual math I came to that)
Use the proper number to fill in the blanks and cross out the improper word
in the parentheses.
Payment number __1___ is the first one in which the principal paid is greater than the
interest paid.

The total amount of interest is $172792.40 __less_ (more or less) than the mortgage.

The total amount of interest is 74.48 % less_____% (more or less) than the mortgage.

The total amount of interest is _25.52_______% of the mortgage.

30-year mortgage

Payment Payment Payment Interest Principal Remaining

Number Date Amount ($) Paid ($) Paid ($) Balance ($)
1. . 2/1/17 1071.14 720.17 350.97 231649.03
2. . 3/1/17 1071.14 719.08 352.06 231296.96
60. . 1/1/22 1071.14 649.74 421.40 208892.21
120. . 1/1/27 1071.14 563.62 507.52 181061.74
240. . 1/1/37 1071.14 334.97 736.17 107174.71
300. . 1/1/42 1071.14 184.52 886.62 58555.64
360. . 1/1/47 1071.14 3.31 1064.51 $0.00. .
total ------- ---------

Payment number _138_ is the first one in which the principal paid is greater than the interest paid.
The total amount of interest is $78389.71__less____ (more or less) than the mortgage.
(Total interest paid is 153610.19)
The total amount of interest is _33.79 less_____% (more or less) than the mortgage.

The total amount of interest is _66.21_______% of the mortgage.

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
$__128606.31____.

The total amount of interest paid with the $100 monthly extra payment would be $25003.88
less_______ (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 16.28%
less_______% (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 ___8_
months; thats __52____ months sooner than paying only the scheduled payments.
Summarize what you have done and learned on this project in a well written paragaph. 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 dont explain everything. Comment on other factors that
must be considered with the numbers when making a mortgage.

On the project I learned how to use an Amortization Schedule which I

think was really beneficial and valuable to gain a new skill with not only
excel, but understanding your finances in a time efficient and organized
fashion. The payment of 1617.82 for my 15 year mortgage was quite high
and higher than the 1071.14 payment at a 30 year mortgage which in real
life would definitely impact my spending and quality of life every month.
Even though the total interest paid is about a 100,000$ difference I feel like
personally I would want to go with a 30 year mortgage and try to get as
much of a down payment as possible to decrease the amount of my loan.
The 30 year mortgage with an extra payment is still quite a difference from
the 15 year mortgage with a 69398.71$ difference in total interest paid but
the numbers still look a lot better to me with just doing a 100$ extra
payment, which is what I would prefer over a 15 year mortgage. This was
insightful to gain a better understanding of where your money actually
goes when you pay towards your mortgage.