# mortgage calculator finite mathematics

Loan Project: Buying a House

For this assignment, you will analyze a home mortgage loan.

1. Find a description, asking price, and real estate taxes of a house for sale,

and decide on a purchase price you would be willing to pay (assuming you

have the means). Find a current market interest rate for a 30-year fixed-rate

mortgage having a down payment of 20 percent of the purchase price.

2. Compute the down payment, amount financed, and the monthly mortgage

payment (showing how to use the appropriate financial formula).

3. Compute the monthly amount of real estate taxes and add to the monthly

mortgage payment to get the total monthly amount paid.

4. Suppose that in order to qualify for the loan, the total monthly amount paid

cannot exceed 30 percent of monthly income. What is the minimum

monthly income needed to qualify for the loan? What is the minimum

annual income needed? (Note: This is a simplified minimum income

requirement calculation, for the purposes of this project, as it does not take

into account other costs such as insurance or other loans or assets currently

held.)

5. Construct an amortization table (using spreadsheet software or online

resources such as http://www.bankrate.com).

6. Assume that the first payment is made in January of the current year. Find

the month and year of the last payment. Find the date of the first month

when the amount applied to the principal exceeds the amount of interest

paid. How many of the 360 payments have been made at this point?

7. Assuming that the mortgage is held for the full 30 years, compute the total

principal paid and the total interest paid.

8. Effectively communicate your analysis, interpretation, evaluation, and the results

you found to be particularly interesting, and why.

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**Your report must include:**

– house’s description, asking price, and real estate taxes, the purchase price,

and the current market interest rate (include references)

– computations and answers for tasks 2, 3, and 4, amortization table for task

5, answers for task 6, and computations and answers for task

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