605 Words3 Pages

Assignment 1: Financial Project
Math 104
Dan Burnell
Five years ago, I bought a house for $151,000.00 with a down payment of $30,000, which means I took a loan for $121,000.00. My interest rate was 5.75% fixed. I would like to pay more on my loan. I check my bank statement and find the following information:
Escrow Payment: $211.13
Principle And Interest Payment: $706.12
Total Payment: $917.25
Current Loan Balance: $112,242.47
I need to explain how much additional money i would need to add to my monthly payment to pay off my loan in 20 years instead of 25 years. If I took 25 years to pay off my loan the monthly
Payment would be $761.22 per month. If it took 20 years to pay off my loan the monthly
Payments would be $849.52 per month. So if I wanted to pay off the loan in 20 years I
Would need to raise my total monthly payment by $88.30 per month.
I also need to explain whether or not it would be reasonable to do this if I currently meet my monthly expenses with less than $100.00 left over. Yes I would be able to meet my monthly
Expenses. Again, if the monthly payment is only $88.30 over my normal payment and I have
Less than $100.00 left over than I could make the additional monthly payment. But that would
Not leave much money left over after I made the additional monthly payment.
It might be possible to pay the current balance off in 20 years if I refinanced the loan at a
Lower interest rate. The interest rate that I will qualify for will depend, in part, on my credit
Rating. I will identify the highest interest rate I could refinance at in order to do this and determine the interest rate that would require a monthly total payment that is less than my current total payment. Also, refinancing costs me $2000.00 up-front in closing costs.
3.75=$665.47 Per Month
4.00=$680.17 Per Month
4.25=$695.04 Per Month
4.50=$710.10

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