CHAPTER 12
ACTIVITY
Mortgage Math
Teacher Directions Hand out the student activity sheet. Students will go to daveramsey.com and use the online mortgage calculator to complete the problems. Answers 1. Down Payment: $37,800 Loan Amount: $151,200 Monthly Payment: $1,275.91 2. Insurance and taxes, which can be escrowed into the account and, therefore, will increase the payment. 3. Down Payment: $0 Loan Amount: $155,000 Monthly Payment: $1,350.05 4.
In te r e s t P a id 180,000 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 1 2 $151,200 Loan $155,000 Loan
ObjECTivE The purpose of this activity is for students to use a mortgage calculator to examine how down payments, interest rates, and loan terms affect monthly payments and total interest paid.
5. Total interest on the $189,000 house: $78,470.51 Total interest on the $155,000 house: $88,045.76 Difference: $9,575.25 6. Their payments will be higher. By putting 20% down on the higher priced house, they save $74.31 per month, or $891.72 per year. 7. Jen and Scott can buy more house and have a lower monthly payment if they put 20% down. They could take the money they save each month on house payments and use that to buy furniture. They could also buy the cheaper house and put 20% down, using the difference in the down payments to purchase furniture.
FOUNDATIONS in PERSONAL FINANCE
8. Down Payment: $31,000 Loan Amount: $124,000 Monthly Payment: $1,046.38 Money for Furniture: $6,800 (Original down payment = $37,800 minus new down payment $31,000) 9. $88,045.76 total interest on zero down $64,354.32 total interest on 20% down Savings: $23,691.44 10. 30-year mortgage interest: $143,644.79 15-year mortgage interest: $64,354.32 Difference: $79,290.47
FOUNDATIONS in PERSONAL FINANCE
Name____________________________ Date_____________________________
STUDENT ACTIVITY SHEET
CHAPTER 12
MORTgAgE MATH
Use the online mortgage calculator at daveramsey.com to compute the monthly...