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Math Question - Cost of Living - Percent

by Lisa
(NJ)











































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.
Multiply your sum by 1500. This is your yearly income for Week Four Discussion 1.
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.
You also have a yearly educational bill of $7980 which includes textbooks and classes.
Calculate your monthly income.
What percent of your monthly income is the car payment?
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.
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.
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?
MOT

Comments for Math Question - Cost of Living - Percent

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May 21, 2011
Cost of Living - Percent
by: Staff

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Part II

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) = $72,000/(12 months) = $6,000 per month


What percent of your monthly income is the car payment?

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

($283.15/$6,000)*100 = 4.72%

The monthly car payment is 4.72% of the monthly income


Subtract the sum of your monthly expenses.

$6,000 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
--------------------------------------
$5,290.13 per month (monthly income after monthly expenses, without educational expenses)

If educational expenses are included:

$5,290.13 per month
-$665 per month, educational expenses
--------------------------------------
$4,625.13 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

($5,290.13 /$6,000)*100 = 88.17%

Available income is 88.17% of the monthly income.


Including educational expenses

($4,625.13 /$6,000)*100 = 77.09%

Available income is 77.09% of the monthly income.


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

$72,000 * .25 = $18,000 down payment


What is the total purchase price you can you afford for a home?

28% of gross monthly income = .28*$6,000 = $1,680

7.70x = $1,680

X = $1,680/7.70 = 218.182

218.182*1000 = $218,182

$218,182 + $18,000 = $236,182

Can purchase a home costing about $236,182


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

Vineland, NJ 08360

Yes

According to zillow.com, there are 417 homes currently for sale in your area (zip code 08360). Many, many of these homes are foreclosures, which will sell well below the market price.

http://www.zillow.com/homes/08360_rb/#/homes/for_sale/Vineland-NJ-08360/61071_rid/priced_sort/39.616471,-74.652522,39.376976,-75.299343_rect/10_zm/3_p/1_fr/


The asking price (out of 417 homes) for the most expensive home currently listed is $226,967. It is located at 566 Sandy Ct., Vineland, NJ 08360

http://www.zillow.com/homedetails/566-Sandy-Ct-Vineland-NJ-08360/2126837851_zpid/#{scid=hdp-site-map-list-address}

This means that you are qualified to purchase the most expensive home in your area code.



Thanks for writing.

Staff
www.solving-math-problems.com


May 21, 2011
Cost of Living - Percent
by: Staff


Part I

The question:

by Lisa
(NJ)

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.

Multiply your sum by 1500.

This is your yearly income for Week Four Discussion 1.

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.

You also have a yearly educational bill of $7980 which includes textbooks and classes.
Calculate your monthly income.

What percent of your monthly income is the car payment?

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.

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.

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?

MOT


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.

First find the monthly income.

$36,000.00 ÷ 12 = $3000.00

Next find 28% of the monthly income.

0.28 * $3000.00 = $840.00

Hence you can afford a monthly mortgage payment of $840.00.

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 = $840
7.70x/7.70 = 840/7.70
x = $109.09

Multiply x by 1000 since the monthly payments in Table 9-1 are per $1000.00 of the mortgage.

$109.09 *1000 = $109,090

Hence, you can afford a mortgage of $109,090
.
Finally, add your down payment of $10,000.00.

$109,090.00 + $10,000.00 = $119,090.00

You can purchase a home costing about $119,090.00.

(The process used here is the reverse of the process used
in Example 9-27 in this chapter.)



The answer:

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

MOT

M (13th letter), O (15th letter), T (20th letter)

13+15+20 = 48

Multiply your sum by 1500.

48 * 1500 = 72000

Yearly income: $72,000
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