Assume that you have found a home for sale and have agreed to a purchase price...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Assume that you have found a home for sale and have agreed to a purchase price of $239700. Down Payment: Assume that you are going to make a 10% down payment on the house. Determine the amount of your down payment and the balance to finance. Down Payment Loan Amount = = $ $ Monthly Payment: Calculate the monthly payment for a 30 year loan (rounding to the nearest cent, so rounding to two decimal places). For the 30 year loan use an annual interest rate of 4.33 %. First, express the annual interest rate as a decimal. The annual interest rate expressed as a decimal is d Now use the loan formula to find the monthly payment, d. The loan formula solved for d is: Po(E) (1-(1 + ) **) Nk Po is the original loan amount. r is the annual interest rate in decimal form. k is the number of compounding periods in one year (so k = 12). N is the length of the loan in years. Monthly Payment: d = $ Assuming you make the monthly payment each month for 30 years, what will be the total amount. repaid? Total payments $ Find the total amount of interest paid over the 30 years. To do so, subtract the amount originally borrowed from the total payments. Total interest paid $ Calculate your Income: As already mentioned, these payments are for principal and interest only. You will also have monthly payments for home insurance and property taxes, but for this lab you will ignore those. In addition, it is necessary to have income leftover for other expenses like electricity, water, food, and other bills. As a wise home owner, you decide that your monthly principal and interest payment should not exceed 35% of your monthly take-home pay so that you have plenty left over for those other expenses. What minimum monthly take-home pay (i.e. your monthly pay checks after taxes) should you earn in order to meet this goal? In other words, 35% of what monthly take-home pay is equal to your mortgage payment? Minimum monthly take-home pay $ It is also important to note that your net or take-home pay (after taxes) is less than your gross pay (before taxes). Assuming that your net pay is 73% of your gross pay, use your monthly take-home pay to find the minimum gross monthly salary will you need to afford this house. Minimum monthly gross pay = $ Now find the minimum annual gross pay you will need to afford this house. Minimum annual gross pay Assume that you have found a home for sale and have agreed to a purchase price of $239700. Down Payment: Assume that you are going to make a 10% down payment on the house. Determine the amount of your down payment and the balance to finance. Down Payment Loan Amount = = $ $ Monthly Payment: Calculate the monthly payment for a 30 year loan (rounding to the nearest cent, so rounding to two decimal places). For the 30 year loan use an annual interest rate of 4.33 %. First, express the annual interest rate as a decimal. The annual interest rate expressed as a decimal is d Now use the loan formula to find the monthly payment, d. The loan formula solved for d is: Po(E) (1-(1 + ) **) Nk Po is the original loan amount. r is the annual interest rate in decimal form. k is the number of compounding periods in one year (so k = 12). N is the length of the loan in years. Monthly Payment: d = $ Assuming you make the monthly payment each month for 30 years, what will be the total amount. repaid? Total payments $ Find the total amount of interest paid over the 30 years. To do so, subtract the amount originally borrowed from the total payments. Total interest paid $ Calculate your Income: As already mentioned, these payments are for principal and interest only. You will also have monthly payments for home insurance and property taxes, but for this lab you will ignore those. In addition, it is necessary to have income leftover for other expenses like electricity, water, food, and other bills. As a wise home owner, you decide that your monthly principal and interest payment should not exceed 35% of your monthly take-home pay so that you have plenty left over for those other expenses. What minimum monthly take-home pay (i.e. your monthly pay checks after taxes) should you earn in order to meet this goal? In other words, 35% of what monthly take-home pay is equal to your mortgage payment? Minimum monthly take-home pay $ It is also important to note that your net or take-home pay (after taxes) is less than your gross pay (before taxes). Assuming that your net pay is 73% of your gross pay, use your monthly take-home pay to find the minimum gross monthly salary will you need to afford this house. Minimum monthly gross pay = $ Now find the minimum annual gross pay you will need to afford this house. Minimum annual gross pay
Expert Answer:
Answer rating: 100% (QA)
Down Payment 10 239700 23970 Loan Amount 239700 23970 215730 433 The annual interest rate expesse... View the full answer
Related Book For
Concepts In Federal Taxation
ISBN: 9780324379556
19th Edition
Authors: Kevin E. Murphy, Mark Higgins, Tonya K. Flesher
Posted Date:
Students also viewed these mathematics questions
-
Following are partially completed financial statements (income statement, statement of retained earnings, and balance sheet) for Shaker Corporation. Complete the financial statements. All amounts are...
-
For each problem, show your work steps. A correct answer with no work shown gets half credit (which means you fail the assignment). An incorrect answer with no work receives 0 credit. With time value...
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
In the late 1980s, various states and the US Congress debated placing limits on sulfur emissions to reduce the impact of acid rain. Utilities that generated electricity using coal-powered plants felt...
-
An 8-kg plunger is released from rest in the position shown and is stopped by two nested springs; the constant of the outer spring is k1 = 3 kN/m and the constant of the inner spring is k2 = 10 kN/m....
-
Following are weights, in pounds, of 12 two-month-old baby girls. It is reasonable to assume that the population is approximately normal. a. Construct a 98% confidence interval for the mean weight of...
-
Little People Learning Center (LPLC) has assembled the following data for the year ended June 30, 2005. Prepare the operating activities section of LPLC's statement of cash flows for the year ended...
-
An 11-m beam is subjected to a load, and the shear force follows the equation V(x) = 5 + 0.25x2 Where V is the shear force and x is length in distance along the beam. We know that V = dM/dx, and M is...
-
Suppose that you confront the following data for a certain non-dividend-paying stock: Stock Price $110 Call Price (6-month maturity, X=$105) $15 Put price (6-month maturity, X=$105) $5 Risk-free...
-
Darcelle teaches skiing at the Snow School. Jack runs a ski shop called Up Hill, Down Hill. Their combined bank interest is $1,000. If they get a refund, they would like the money deposited into...
-
Let R1 and R2 are the remainder when the polynomials x3+2x25ax7 and x3+ax212x+6 are divided by x+1 and x2 respectively. If 2R1+R2=6, find the value of a.
-
An IQ test was given to a simple random sample of 75 students at a certain college. The sample mean score was 105.2. Scores on this test are known to have a standard deviation of = 10. It is desired...
-
The researchers now plan to construct a 99% confidence interval for the test scores described in Exercise 11. a. What is the critical value z2 for this confidence interval? b. Find the margin of...
-
When the number of degrees of freedom is large, the Students t distribution is close to the ______________ distribution. In Exercises 7 and 8, fill in each blank with the appropriate word or phrase.
-
Level 95% In Exercises 2528, find the critical value z2 needed to construct a confidence interval with the given level.
-
Under limited circumstances, CPAs may express unqualified opinions on financial statements that utilize accounting principles other than those for- mulated by designated bodies. Give two examples of...
-
Ms. Anne Anderson opens her own law office on July 1, 2013. During the first month of operations, the following transactions occurred. July 1. Ms. Anderson invested $15,000 cash in the law practice....
-
Quadrilateral EFGH is a kite. Find mG. E H <105 G 50 F
-
Arlene is a lawyer. She begins the current year with $12,000 in accounts receivable from customers. During the year, she bills customers $210,000 in fees and receives $180,000 in payments on account....
-
Charles buys a car for $15,000 that has a fair market value of $10,000. Identify the tax issue(s) posed by the facts presented. Determine the possible tax consequences of each issue that you identify.
-
Return to the facts of problem 22. Assume that Mayfair Corporation exchanges its machine for another machine worth $18,000. How much boot must be paid to make the exchange, and who must pay the boot?...
-
Determine the maximum eccentric load \(P\) the 2014-T6aluminum-alloy strut can support without causing it either to buckle or yield. The ends of the strut are pin connected. a $150 mm 150 mm 100 mm...
-
The W14 \(\times 26\) structural A-36 steel member is used as a column that is assumed to be fixed at its top and pinned at its bottom. If the 15-kip load is applied at an eccentric distance of 10...
-
The W14 \(\times 26\) structural A-36 steel member is used as a 20 -ft-long column that is assumed to be fixed at its top and fixed at its bottom. If the 15-kip load is applied at an eccentric...
Study smarter with the SolutionInn App