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Math 126 Week 4 Discussion 1

by Johannie Gonzalez
(Brooksville, FL 34601)










































the sum of my letters is 31 what would be the answer to this discussion

Comments for Math 126 Week 4 Discussion 1

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Apr 23, 2012
Calculate the Value of the Home You Can Afford
by: Staff

Question:

by Johannie Gonzalez
(Brooksville, FL 34601)

the sum of my letters is 31 what would be the answer to this discussion


Answer:

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?

10. 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.

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

the sum of your letters = 31



Multiply your sum by 1500.

31 * 1500 = 46500

Yearly income: $46,500

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

Subtotal = 709.87

Yearly educational bill (includes textbooks and classes): $7980

$7980/12 = $665 per month


Calculate your monthly income.

(Yearly income)/(12 months)

= $46,500/(12 months)

= $3,875 per month


What percent of your monthly income is the car payment?

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

($283.15/$3,875)*100 = 7.3071%

The monthly car payment is 7.3 % of the monthly income

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Apr 23, 2012
Calculate the Value of the Home You Can Afford
by: Staff

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Part II


Subtract the sum of your monthly expenses.

$3,875 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
--------------------------------------
$3,165.13 per month (monthly income after monthly expenses, without educational expenses)

If educational expenses are included:

$3,165.13 per month
-$665 per month, educational expenses
--------------------------------------
$2,500.13 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

($3,165.13 /$3,875)*100 = 81.6808 %

Available income is 81.7 % of the monthly income.


Including educational expenses

($2,500.13 /$3,875)*100 = 64.5195 %

Available income is 64.5 % of the monthly income.


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

$46,500 * 25 %

= $46,500 * .25

= $11,625 down payment



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 % * $3,875

= .28 * $3,875

= $1,085

You can afford a monthly mortgage payment of $1,085.00.

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 = $1,085

x = $1,085/7.70 = 140.909

You can afford a mortgage of 140.909*1000 = $140,909

Finally, add your down payment of $11,625

$140,909 + $11,625 = $152,534

Can purchase a home costing about $152,534


(NOTE: there is something left out of these calculations – taxes and insurance. Taxes and insurance will probably cost 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 $152,534 figure.)


Would this amount ($152,534) allow you to purchase a home in the area where you live?
Brooksville, FL 34601

Yes

According to zillow.com, there are currently 227 homes currently for sale in Brooksville, FL (zip code 34601) . Many of these homes are priced below $152,534


http://www.zillow.com/homes/Brooksville,-FL-34601_rb/




Thanks for writing.

Staff
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