Compound Interest Home Buying Project College Prep Math Project Example.

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Presentation transcript:

Compound Interest Home Buying Project College Prep Math Project Example

I will do a problem with you for a $320,000 home. 1.What is the asking price for your home? Asking Price: _____$320,000____(AP) 2.Find the selling price. (SP 95% AP)Selling price: ________________(SP) 3.What down payment does your bank require? % Down Required: _________________(%D) Find that percentage of the selling price. (DP = 20%D SP) Down Payment: ________________(DP) 4.Find your loan amount. Loan Amount P = SP – DP. LOAN AMOUNT:___________________ (P) $304,000 20% $60,800 $243,200

5. What is the interest rate that your bank is charging for a 30-year fixed rate loan? Interest Rate: ______________________ (r) 6. Determine your monthly loan payment using the following formula: r = annual percentage rate t = length of the loan in years P = loan amount M = monthly payment M=(P(r/n))/(1-(1+r/n)^(-n*t)) Monthly mortgage payment: ___________________(M) 4.25% $1,196.40

7. What is the Full Year taxes for the city you bought the house in? Full Year Taxes = __________(FYT) 8.Determine the monthly taxes. MT = FYT 12.Monthly Taxes: __________________(MT) 9.Determine your monthly house payment MHP = M + MT Monthly House Payment______________(MHP) $ 4,500 $ 375 $