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Lost in Mat 126 - MAT 126 week 4 discussion 1
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Lost in Mat 126 - MAT 126 week 4 discussion 1







































This is MAT 126 week 4 discussion 1 from the Ashford University link. The first three letters of my last name is WHI.This is figuring percentage of DTI.

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Feb 14, 2012
MAT 126 week 4 discussion 1
by: Staff

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Part III

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*$5,000 = $1,400.00

You can afford a monthly mortgage payment of $1,400.00

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 = $1,400.00

X = $1,400.00/7.70 = 181.818

You can afford a mortgage of

181.818*1000 = $181,818

You can afford a mortgage of $181,818

Finally, add your down payment of $15,000

$181,818 + $15,000 = $196,818

Can purchase a home costing about $196,818



Would this amount allow you to purchase a home in the area where you live?

Ashford University is located in Clinton, IA 52732.

However, your ISP indicates that you access the internet from LIVINGSTON, NEW JERSEY (zip code: 07039). I’ll assume you live in Livingston when answering this question.



The answer is:

No

Homes in Livingston, New Jersey are very expensive. Most of the homes are out of the price range for someone earning $60,000 per year if they must pay 7% interest for a 25 year loan with a $15,000 down payment (per this problem statement).

However, current interest rates are in the 4% range (much lower than 7% indicated in the problem statement). In addition, there are many foreclosures in Livingston.

As lenders and other sellers become more and more desperate, they are likely to lower the asking price. This could make it possible for someone earning $60,000 per year to purchase a home in Livingston.

Current listings are available on Zillow:

http://www.zillow.com/homes/07039_rb/







Thanks for writing.

Staff
www.solving-math-problems.com



Feb 14, 2012
MAT 126 week 4 discussion 1
by: Staff

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Part II

Calculate your monthly income.

(Yearly income)/(12 months) = $60,000/(12 months) = $5,000 per month


What percent of your monthly income is the car payment?

[(Monthly car payment)/(Monthly income)] * 100 = % car payment

($283.15/$5,000)*100 = 5.663 %

The monthly car payment is 5.7% of the monthly income


Subtract the sum of your monthly expenses.

$5,000 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
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$4,290.13 per month (monthly income after monthly expenses, without educational expenses)

If educational expenses are included:

$4,290.13 per month
-$665 per month, educational expenses
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$3,625.13 per month (monthly income after monthly expenses, including educational expenses)

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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

($4,290.13 /$5,000)*100 = 85.8026%

Available income is 85.8% of the monthly income.


Including educational expenses

($3,625.13 /$5,000)*100 = 72.5026%

Available income is 72.5% of the monthly income.


Assume you can afford a down payment equal to 25% of your yearly income.

$60,000 * .25 = $15,000 down payment

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Feb 14, 2012
MAT 126 week 4 discussion 1
by: Staff


Part I

Question:

This is MAT 126 week 4 discussion 1 from the Ashford University link. The first three letters of my last name is WHI.This is figuring percentage of DTI.


Answer:

MAT 126 Week 4 Discussion 1
________________________________________
The purpose of this Discussion is to analyze a financial plan that portrays a somewhat typical budgeting scheme. You will calculate expenses, a mortgage payment, and the effects of interest and financing on your budget. Show your math work for every answer and identify the answers with words.
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.
5. Calculate your monthly income.
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 454, “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?
Respond to at least two of your classmates’ postings. Make sure you review their calculations and let them know if their income seems sufficient to cover their monthly expenses.



Answer:


DTI: debt to income ratios


Select the first three letters of your last name. Add the three place values together.

WHI
W (23rd letter), H (8th letter), I (9th letter)

23 + 8 + 9 = 40

Multiply your sum by 1500.

40 * 1500 = 60000

Yearly income: $60,000

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

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