# Budget Plan – expenses, mortgage, interest

by Pat
(Sait Pauls )

Include (A) monthly and yearly income; and (B) expenses for a car payment, car insurance, utilities, internet, and cell phone.

Last Name: Russell

1. Select the first three letters of your last name. Each letter has a numerical place value in the alphabet. For example, D is 4, L is 12, and Z is 26. Add the three place values together. For example, Wallace would yield WAL, which is 23+1+12 = 36.
2. Multiply your sum by 1500. This is your yearly income for Week Four Discussion 1.
3. Please use the following monthly expenses: Car payment = \$283.15, Car insurance = \$72, Utilities (includes water and power) = \$242.77, Internet = \$32, and Cell Phone = \$79.95.
4. You also have a yearly educational bill of \$7980 which includes textbooks and classes.
6. What percent of your monthly income is the car payment?
7. Subtract the sum of your monthly expenses. Use this value to calculate what percent of your income is now available to spend for food, clothing, and your rent or mortgage.
8. Use the plan at the bottom of page 538, “Mathematics in Our World Revisited,” to calculate the monthly mortgage payment established by your monthly income.
9. Assume you can afford a down payment equal to 25% of your yearly income. What is the total purchase price can you afford for a home? Would this amount allow you to purchase a home in the area where you live?

### Comments for Budget Plan – expenses, mortgage, interest

 Aug 12, 2012 Budget Plan by: Staff Answer: Select the first three letters of your last name. Add the three place values together. RUS R (18th letter), U (21st letter), S (19th letter) 18 + 21 + 19 = 58 Multiply your sum by 1500. 58 * 1500 = 87000 Yearly income: \$87,000 Monthly expenses: Car payment = \$283.15 per month Car insurance = \$72 per month Utilities (includes water and power) = \$242.77 per month Internet = \$32 per month Cell Phone = \$79.95 per month Yearly educational bill (includes textbooks and classes): \$7980 \$7980/12 = \$665 per month Calculate your monthly income. (Yearly income)/(12 months) = \$87,000/(12 months) = \$7,250 per month What percent of your monthly income is the car payment? [(Monthly car payment)/(Monthly income)] * 100 = % car payment (\$283.15/\$7,250)*100 = 3.90552 % The monthly car payment is 3.9 % of the monthly income Subtract the sum of your monthly expenses. \$7,250 per month, monthly income -\$283.15 per month, Car payment -\$72 per month, Car insurance -\$242.77 per month, Utilities (includes water and power) -\$32 per month, Internet -\$79.95 per month, Cell Phone -------------------------------------- \$6540.13 per month (monthly income after monthly expenses, without including educational expenses) If educational expenses are included: \$6540.13 per month -\$665 per month, educational expenses -------------------------------------- \$5875.13 per month (monthly income after monthly expenses, including educational expenses) --------- Calculate what percent of your income is now available to spend for food, clothing, and your rent or mortgage. [(Monthly income after payments)/(Monthly income)] * 100 = % available Without including educational expenses (\$6,540.13 /\$7,250)*100 = 90.2087 % Available income is 90.2 % of the monthly income. Including educational expenses (\$5,875.13 /\$7,250)*100 = 81.0363 % Available income is 81.0 % of the monthly income. Assume you can afford a down payment equal to 25% of your yearly income. \$87,000 * .25 = \$21,750 down payment -------------------------------------------------------

 Aug 12, 2012 Budget Plan by: Staff ------------------------------------------------------- Part II What is the total purchase price you can you afford for a home? Mathematics in Our World Revisited How Much Can You Afford to Pay for a Home? ▲ Experts suggest that a person can afford to pay 28% of his or her gross monthly income for a home mortgage. Given this assumption and using Table 9-1 on page 435, you can ﬁgure out how much you can afford to pay for a home, as shown. 28% of gross monthly income = .28*\$7,250 = \$2,030 You can afford a monthly mortgage payment of \$2,030 Now to see what you can afford to borrow, look up the number corresponding to 7% and 25 years in Table 9-1 on page 435. It is 7.70. Set up an equation and solve for x. 7.70x = \$2,030 X = \$2,030/7.70 = 263.636 You can afford a mortgage of 263.636*1000 = \$263,636 You can afford a mortgage of \$263,636 Finally, add your down payment of \$21,750 \$263,636 + \$21,750 = \$285,386 Can purchase a home costing about \$285,386 (NOTE: there is something left out of these calculations – taxes and insurance. Taxes and insurance will probably ad another \$300 to \$400 per month. However, I am going to ignore the taxes and insurance. I will answer the last question based on the \$285,386 figure.) Would this amount allow you to purchase a home in the area where you live? According to your IP (I’ll assume it is not a proxy IP address), you live in Clarksville, Tennessee. Clarksville, Tennessee (zip code: 37043 ) Yes With a monthly income of \$7,250 you can easily afford a home in Clarksville, Tennessee. To see listings of homes in that area, open the following link: http://www.zillow.com/homes/37043_rb/ Thanks for writing. Staff www.solving-math-problems.com