# Math 104 Assignment 1

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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